Lets work together!


#1

Hi all, I thought I might give this a try. I recently inherited some minerals from my late father that are all over Grady County. I’m sure all of you have been for a while, but I recently started receiving offers for the mineral rights I inherited. I have absolutely no experience regarding oil and gas so at first when I received these offers I didn’t know what to think. I found this website and started browsing through the discussions on Grady County and found a few people talking about their mineral rights and what they were getting offered. So, I thought I might try to start a discussion where we people can come to and see what people are getting offered for their minerals. My thought behind it, more information for more people is better for everyone involved. Personally, I agree it is better to hold onto your mineral rights however I also understand that sometimes things happen and people end up needing money fast. I just want to make a place where everyone can make sure they are getting the best offer possible and not undercut.
Thanks and here are some of the offers I received with corresponding section township and range.
6. 11N-8W 18,500
19. 10N-8W 6,900
30. 10N-5W 12,000
35. 10N-6W 13,750
19. 9N-5W 19,000


Offers in 35-9N-7W
#2

30-10N-8W $12,000/ac not sure about royalty


#3

Offers depend on the formation that goes through your property. Someone might get an offer because the formation is a lot better and the payoff will be better. Others might get a smaller offer because their property is just outside of the formation. Just because you get a higher offer doesn’t mean that everyone gets the same offer.


#4

You sound like someone that works for a Mineral Company! Just joking… but yes as I’m sure that is true. I also think the mineral companies can show me their research if they want to offer me $5,000 less than someone in my same section


#5

Just wanted to be clear. Are these offers to purchase minerals or are these lease bonuses? I assume that the these are the prices per acre. If for leases what royalty percentages?


#6

I initially intended it to be for offers on mineral rights, but I think any information regarding mineral rights will be helpful to people.


#7

Received an Offer to purchase 80 acres in Grady county in 11-6-7 for 21,000. Well has been spud and is in the fracking phase now. Needless to say, I didn’t sell. Also I’ve received at least 6 offers on 4-5-5. Highest offer was 12,500.


#8

We have minerals in grady county. At least 25 offers. I read where whatever you’re offered it’s worth 10x that much. Maybe someone else can add to this statement.


#9

Not always. If you get an offer over $20,000 an acre they would have to drill more than one well in that section to make it worth their pay-out and there is no way it is ever worth 10 times that amount. I have paid what I thought was the going rate for minerals and now years later realize I will never see a return on them. Ultimately the mineral owner looks at the money number when the purchaser looks at many other things. One reason they may pay someone more than you in the same section is that you have a 3/16 lease and the other person may have a 1/4 lease or even better…no lease at all. If they can buy your minerals un-leased they would be able to participate in the wells. The best purchase numbers I have ever seen was where they leased the minerals at a 1/4 and then went back and purchased them for over $50,000 an acre. When you crunch the numbers using production in that area, they would have to drill at least 5 wells in that section to make it worth that kind of pay out. This mineral owner also owned 150 acres in that section. Which probably made a difference. This is one instance when I told my clients to sell !! You never know whether a company will drill one well or seven. It’s all a crapshoot.


#10

Hi Clyde,
Mineral rights value can vary greatly depending on a number of things. Before selling I would check the county records to see what has sold near you. I have some in Grady county that I have been offered $19,000 per acre. Grady county is very hot right now. Keep in mind that if it is worth that much to them then it is probably worth more than that because they plan on making money off the deal.


#11

Do not forget about “time value of money”. Of course the buyer wants to make money because they are taking the risk that the well(s) will make enough revenue to break even. Remember what we learned a long time ago- “A bird in the hand…”


#12

Todd,
You are right about the end risk but many of these guys are speculating on the increased future price and are planning to resell. That $19,000 offer I mentioned was $12,000 last year and $8,000 the year before that.


#13

Time Value of Money is a buyer’s aspect. But don’t forget the value that passes from generation to generation. As new technology comes into play, there is an argument that the minerals could yield in future generations which is not known today. The is the aspect seller’s have to consider for their families.


#14

I wouldn’t say that the “Time Value of Money” is a buyers point of view only. It can apply to anyone, it just simply means that a lump sum of money now is worth more than the same amount of money collected slowly over time because that lump sum of money now has earning potential now. It could be stocks, bonds, real estate, etc. There is certainly something to be said about passing the rights down to each generation, there is a really nice nostalgic feel to it. But an argument could be made that investing that lump sum of money could result in a larger asset passed down to future generations. One could make arguments for both sides and thats why I like these discussions everyone gets to voice their opinion. I just wanted to make the point that the Time Value of Money doctrine is not just from a buyers point of view it applies to anyone…


#15

Also consider future technology enhancements to recovery. I am currently sitting in talks at the Unconventional Resources Technology Conference. Current recoveries in these reservoirs are generically at about 10%. The last three talks have been in enhanced recovery techniques trying to get another 10-15% out, so double or more using current experiments. This play has tremendous potential for the future generations of our families. We are barely scratching the surface of what can be done. Think long term! Think time value of money. Think exports of oil and gas-new export facilities being built now. Think changes in transportation, carbon capture, and all sorts of new ideas. This group of geologists, geophysicists, engineers, financial folks are thinking decades ahead and are excited.


#16

Margaret,

As usual, you have a great perspective. Wish I could be at those meetings as they sound fascinating.

Regards,

Carla


#17

A post was split to a new topic: Electric Vehicles Impact on OIl and Gas


#18

The meetings today were on Enhanced Oil (and Gas) Recovery and what they are working on for the future. About 180 exhibitors, thousands of us science types. It was refreshing and exciting.


#19

Terisalou…Is that a purchase price per acre?


#20

Who offered $12500 in 4 of 5N5W