I have a very small 3.33 acre mineral rights in Howard Cty., leased @20% less cost,(.00417%) to Encana, that I inherited several years ago. I only received apx. $215 this past year just enough to keep the lease in effect. I am receiving numerous offers to purchase the mineral rights & really don't know their value, but the offers are in the $50,000 range and very tempting. With such a small interest & income percentage (.00417) would it be advisable to sale? I would appreciate any information regarding what is going on in this area. Thank you for any comments.
Legacy has just drilled two horizontal wells in an adjacent section. Other wells permitted or drilled nearby. You are getting offers because of expectation of activity heating up on your section. Hang on and you will be in some wells. Look on RRC gis map to see what is going on.
Thank you, TennisDaze. I am a novice at this & trying to find places to learn.
The offers you will get are likely in the range of 20-25% of what the buyers think the interest can potentially return over the next 10-15 years. If you want to cash out now just be sure you get paid up front and don't mess around with low riders. A little legal or banker advice can be helpful.
Joe, thank you for the good advise.
The company that contacted me is Escondedo Minerals but their paperwork is from Rock River Minerals.
Has anyone done business with them?
They are using a bank for escrow & sent a bank draft to be paid in 30 days if I sign the intent to sell and they approve the deeds.
I am still undecided,
Be careful about wording of intent as it likely commits you to sell, but does not commit purchaser unless satisfied in its discretion. Add note that if purchaser determines that you own less than 3.333 net acres and total price paid will be less than full offer, that you have right to refuse to sell. You do not want possibility that purchaser could claim you own fewer acres and pay accordingly and then you find out you own the full 3.33 acres and were underpaid. Do not sign intent to sell everything you own in the county or a deed that covers more than the 3.33 acres, because you might own other acreage and lose out. You should consider having an attorney review the wording of the intent and the deed. Also, do not hand over original signed deed unless and until you have money in hand.
worth $125,000 an acre or more.