Landman wants me to send royalty statements

I have properties in Grady and Stephens counties. A landsman contacted me and wants me to send royalty statements for the parcels with producing wells. Says he needs that to determine sale or lease offer prices. He estimates 10K/acre for purchase of rights in Grady 01-6N-7W Is his request for statements appropriate? What prices are current in that section?

If you and he are discussing the sale of your properties, the review of revenue statements is very appropriate. Frequently, the sale price is based on how much revenue the seller is receiving. In other words, if you were discussing rent houses, a rent house that produced $100/mo more than a like property would fetch a higher price.

Great analogy Tim, it’s always impressive how you can answer questions so succinctly.

If you are not interested in selling, then do not send statements. If you are interested leasing, then the statements are not necessary. If the call came out of the blue, I would be hesitant.

Be aware that Camino has applied for an increased density hearing. Offers to buy often appear when increased density cases show up on the docket. Offers to buy often say they will buy the royalties on the first well, (with low royalties) but don’t tell you that a horizontal well is about to be drilled (much higher pending royalties). There is another case pending for a horizontal well with section 1 & 36 and the matching location exception case. If your name and address are properly filed at the county courthouse, then you should have received the mailings on the three cases.

Thanks Martha,

Can you tell me what level of purchase offers companies are making in Grady 01-06N-07W? Or what level is appropriate given the actions here.

I do not have any acreage in 1-6N-7W, so do not know specifically. Offers will have a royalty attached to them. The closest one that i have heard was in section 12 with $12,000 @ 1/5th (in 2022). Lower royalties will have a lower offer, higher royalties will have a higher offer. As to what is appropriate, that is for a willing buyer and a willing seller to agree upon.