Our family is looking to lease and/or possibly sell our 6,000 acres Mineral Estate in North Cape Coral near Fort Myers, Florida. This mineral estate has been in our family since 1950. Florida appears to be the next focal point for horizontal/lateral drilling. There are currently oil-producing fields in Fort Myers and in the Everglades in Collier County at the Sunniland Trend. Our Mineral Estate appears to be in the Rubble Zone Trend, relatively near the producing Sunniland Trend. We have been speaking with a couple interested parties and in preparation to negotiate a possible lease or sale, I would appreciate a little insight on the following:
1. What is the going rate for lease pricing per acre, etc. and Royalties percentage?
2. What is the typical lease period, i.e., 4 years paid up front, plus an extension of 4 years?
3. Also, what are the taxes that would have to be paid on a lease?
4. Would negotiations include a bonus up front as well, and if so, is it typically a percentage of the total yearly lease amount, or it is a flat fee?
5. Regarding a possible outright sale of the Mineral Estate, what would be a approximate range for a price per acre?
We are new to all of this and appreciate any feedback.
Thanks, Mayra
Mayra,
If your family has managed to hold control of 6000 acres together since 1950 you are indeed farsighted as well as fortunate. Depending on the location of your minerals relative to the Lehigh or West Velda fields, both in the Sunniland Trend, I believe, you could be in both the Sunniland and Rubble Zone Trends. Both trends are more in the category of high permeability, structurally controlled reef oil accumulations rather than unconventional shale plays so popular these days. The deposits seem to be similar to the shallow Michigan Basin reefs but about 4 times deeper.
I suggest that you confirm legal control of the large acreage block then learn as much about the geologic potential as possible. With that information, you may be able to attract a reef experienced operator or two that will know how to exploit your oil potential and make a deal that will allow you to retain control of the very valuable fresh water rights and construction stone rights. An operator experienced in your area will understand the huge environmental aspects of the area as well as the value of gaining exploration control of such a large block of minerals. In other words, make a specific business plan for your property and pursue it. A good business plan could mean tens of millions of dollars to your family if it is done right and the lessee/buyer is properly selected. We know that the oil is there so finding where it has accumulated then extracting efficiently is the key to success. Your family could be in a unique situation to dictate terms rather than take what someone else offers.
Mr. Hutchinson, Thank you so very much for your response and professioal advice going forward.
I would like to clarify the part in which you mention for us to "retian control of the very valuable fresh water rights and construction stone rights". The reason I ask is that this is a severed Mineral Estate, and we do not own the surface. So, do the water rights and construction stone rights such as in "limestone" belong to the Mineral Estate or do they belong to the surface owner in Florida? Not sure if you know this information. We would greatly appreciate your reply.
Again, thank you.
Mayra
Mayra,
I have worked with both limestone and phosphate quarries in Florida and don't know who owns the mineral rights as these were ongoing operations. (i'm in geology, engineering and economics) I know that in Texas, if it is mined from the surface, it is owned by the surface owner otherwise it it owned by the mineral owner if severed. Most western states are different from Texas in that regard. I'm sure a real estate professional could tell you quickly about your questions regarding water and quarried mineral rights. I have a couple of professional associates in Florida that will know the answer so let me know if you need more legal info. I will send a "friend" message.
Gary Hutchinson
Mayra Salo said:
Mr. Hutchinson, Thank you so very much for your response and professioal advice going forward.
I would like to clarify the part in which you mention for us to "retian control of the very valuable fresh water rights and construction stone rights". The reason I ask is that this is a severed Mineral Estate, and we do not own the surface. So, do the water rights and construction stone rights such as in "limestone" belong to the Mineral Estate or do they belong to the surface owner in Florida? Not sure if you know this information. We would greatly appreciate your reply.
Again, thank you.
Mayra