I just got a letter from some company named Southwest Petroleum to buy my mineral and royalty and offered a couple of hundred dollars. They even sent a draft check with the letter.
Karnes County, beware of what you get in the mail.
Texas Lady, not signing no papers.
Texas Lady,
Your minerals (Live Oak County and Karnes County) are in a fantastic part of the Eagleford. Don’t even think about selling to anyone. After reading some of the ‘Completion Reports’ on those two counties, you’re in a great area.
Complaint on Southwest Petroleum-Dallas: From Dallas Better Business Bureau.
Tear that offer into a thousand pieces. You don’t know who is going through your garbage or what they would do with that offer. I get them all the time. After I saw a fellow going through the dumpster, I now consign them to the wood stove.
I think those offers must be computer generated and sent out to anyone with minerals in a certain area.
Texas Lady: I couldn’t agree more with Mr. Liles. As a mineral/royalty owner we get these buyout offers on a regular basis from many of these firms. We promptly put them in our paper shredder. There may be a place for these services such as Estate liquidations and such but the offers are typically pennies on the dollar of actual value. Also these outfits know more often than not that something is going on in the area they are interested in and that is another reason to do some research and determine if you are in a productive area for exploration.
I also get a lot of these offers and I void them and then burn them up in the back yard.
Thank you so much for your reply, but I can’t imagine the nerve of these companies to try to buy your minerals for just a couple of hundred dollars. I think they are probably saying we are in need of money and we would sell.
But I did what all of you said: I shredded the papers then I burned them. It probably won’t be the last that I get, but I sure will take the advice you gave me, Texas Lady.
Once these things start coming, they don’t stop. I see them as a good omen. Nobody wants to buy worthless minerals. The day they stop coming I will worry.
These people have better knowledge of what is happening than we do. They take advantage of our ignorance.
The only way I can see someone selling their minerals would be if they were at death’s door and they hated their relatives.
Texas Lady:
I have been leasing since 2004 in the North Dakota/Montana areas and since that time, I have received numerous offers to sell my mineral holdings, of course all low ball in nature. Companies such as Dale Resources LLC, Aegis Energy Partners, US Mineral Resources and Bridgepoint Mineral Acquisition are among some that come to mind. Best to shred the letter and proceed ahead. It would be interesting to know how many uninformed mineral owners accepted these deals over the years. Don’t ever even consider replying to any of these offers.
Thank you sir for your reply, when I got this I was stunned didn’t know what it was I started to read when it said want to buy your minerals and royalty I said WHAT!! NO WAY!
My minerals and royalty may not be a lot, but what I have is a blessing because I didn’t even know I had so for those companies that are trying to buy me out NO Way! I’m so glad I have friends to talk to here and get advice.
Texas Lady,
Get lots of these offers too. Most seem to be the exact amount the county shows as taxable value on the county CAD website. Also get them when more than one or two permits are issued on the RRC website. I am sure they have a process for data mining websites.
Asked my lawyer if the offers could be used to value an estate for probate, he laughed but I could tell he was thinking.
DO NOT SELL
Texas Lady and others: This is an important topic and can snare the unwary and those not familiar with minerals management. If you carefully read most if not all of these offers there is typically a clause that states they are attempting to purchase not only a specific mineral property but ALL the mineral properties one may own in one County. That is a Countywide Conveyance. I think this practice should be outlawed as it can be deceptive should one wish to entertain such offers.
We have received some that looked just like a lease until one reads the fine print. They must be snaring someone, or they wouldn’t continue sending these things out. Always read the print, front and back.
My suggestion is destroy immediately. If someone wants to purchase or lease, their first step should be to contact you via phone prior to sending mail outs. Some don’t want to do this as their trap is contained in the body of these type letters or leases. By all means, let a qualified individual read the material and advise you before any signing is done.
I am a mineral buyer, and thus I feel the need to defend our ranks. My group never sends drafts, or blank checks - this is pretty shady. We send a letter acknowledging our interest in purchasing whatever minerals the recipient may own in a specific county, with the caveat that they should call us to discuss an offer. We then run title at our own expense, and present a fair offer. People sell for numerous reasons: 1. They need the upfront cash, 2. They sell a portion of their interest in order to take some chips off the table - this is a good way to hedge your bets by selling some for upfront cash, while holding onto some minerals should they be developed. 3. People are trying to divest their minerals for estate planning. We try to leave every deal with all parties walking away happy. That said, my group typically buys non-producing minerals in prospective areas. We do not scour the tax rolls. So, I’m sure this will not change anyone’s mind about us, but as with anything, there are good, scrupulous buyers, and there people trying to scam. We are not all the same.
Better yet, before entering into a contract of any type… consult an attorney. I am an Independent Petroleum Landman and I have never had an issue with having a mineral owner take a lease form to their attorney.
The salient point here is never sign a legal instrument until you fully understand its content and its potential ramifications and effects.
Robert V. Gill said:
We have received some that looked just like a lease until one reads the fine print. They must be snaring someone, or they wouldn’t continue sending these things out. Always read the print, front and back.
Anyone sending me a draft is on the beware list.
Most glean addresses from the public tax records or integration hearings where the company identifies unleased and leased mineral owners in the pool.
Most are weasels and none intend to pay “too much”. I just saw where some people from Florida sold their mineral rights in Arkansas to a company which immediately flipped them from $1,150 per acre to $2,600. That mineral party in turn flipped them again to a larger royalty firm for $2,860 per acre.
I have recently received offers from a company called Enerlux, complete with draft checks. I answered on their email address and the note bounced back. Does anyone know anything about this company?
Larry, I do not know this company, but if you would like to discuss an offer, please call me at 469-688-0800. You can read my post in this thread for reference on the way I do business.
Larry Cansler said:
I have recently received offers from a company called Enerlux, complete with draft checks. I answered on their email address and the note bounced back. Does anyone know anything about this company?
In addition to Mr. Gillespie’s industry segment, there are firms which seek only to purchase ‘production royalties’ for a lump sum. These firms generally try to identify potential interest by sending out mass mailings using lists of people who own royalty interests in currently producing wells. I believe these mailings generate an average of 3 responses per 1000 letters sent.
These contact letters, in and of themselves, are harmless. The information contained is all of public record. So long as one does not sign a Deed, Mineral Deed, Royalty Deed, Assignment or other legal instrument, all of which require notarization, you cannot lose anything. Rushing to the burn barrel to cremate one of the evil advertisement letters is an exercise in futility…a letter is in no way binding on anyone.
There are a plethora of reasons why some royalty owners would prefer to divest their future royalty payments for a lump payment. Selling one’s royalty interest in and to the production from a certain well does not necessarily mean you have ‘sold your minerals’ or you have no future royalty interest in future wells which could be completed under a future oil & gas lease.
There is night and day difference between selling your mineral interest outright, (which means you no longer own those mineral rights), and selling your royalty interest in a specific well.
As always, if you do not understand what a legal instrument contains…consult your attorney before you sign it!!
Graham Gillespie said:
I am a mineral Buyer, and thus I feel the need to defend our ranks. My group never sends drafts, or blank checks - this is pretty shady. We send a letter acknowledging our interest in purchasing whatever minerals the recipient may own in a specific county, with the caveat that they should call us to discuss an offer. We then run title at our own expense, and present a fair offer. People sell for numerous reasons: 1. They need the upfront cash, 2. They sell a portion of their interest in order to take some chips off the table - this is a good way to hedge your bets by selling some for upfront cash, while holding onto some minerals should they be developed. 3. People are trying to divest their minerals for estate planning. We try to leave every deal with all parties walking away happy. That said, my group typically buys non-producing minerals in prospective areas. We do not scour the tax rolls. So, I’m sure this will not change anyone’s mind about us, but as with anything, there are good, scrupulous buyers, and there people trying to scam. We are not all the same.