Mineral and Royalty Conveyance

Texas Mineral Rights
1

Hi All:

I have a company interested in purchasing my mineral rights. They sent me a letter with the offer along with a conveyance document. They are telling me to sign it and have it notarized and send it back, at which time they will cut me a check.

Is this normal? I’m hesitant to sign anything until I have cleared funds in my bank.

Can anyone help?

Thanks.

2

Why would you want to sell? Think twice. You never know what the future will be, and it could be worth more in the years to come. Talk to people around the area where you have minerals, and see what they have been offered.

3

Josh,

I get offers all the time. Since 1/1/13 on one well where I have a 1.04% Royalty I have received in excess of 34 offers with the lowest being $12K and the highest being $125k. They are buying everything you own in that county, both producing and non producing. this will kill the goose that lays the golden egg.

A friend of mine who owns one of those companies who is always filling your mail box, confided to me that they had a minimum profit of 25% day one but often times quite a bit more.

I would make sure that this is what you want to do before you sign that.

Also, it could be that the lease is holding far more acreage than what is being used in production and are you being fairly compensated for that for which production is not currently taking place.

I would sleep on this decision, and maybe ponder it for years to come...in other words, no thanks.

4

If you have decided to sell, then unless you know the purchaser quite well, I would either (i) tell them you will hand over the executed, notarized conveyance document when they hand you a bank certified check for the consideration, or (ii) give your lawyer the fully executed conveyance, with instruction to release it when you confirm the receipt of good funds in your bank account, and send a copy of the doc to the buyer telling the buyer you have authorized your attorney to release the conveyance when your funds have cleared -- noting that the copy does not constitute delivery.

Your concern is warranted; it is difficult and expensive to undo a conveyance you have delivered for which they never pay.

5

Thanks for the feedback! Unfortunately, my money situation is dire and this sale would help my family out of a big jam. I have three small children and as much as I hate to sell, I have to look out for them.