I've just had a call from a Haggard Land Company out of Oklahoma City asking to purchase my mineral rights in Kiowa County. Their offer was 10 x the lease price. No deal! Anyone else get such a call? Anyone aware of any new activity?
Which state?
Colorado
Susan B said:
Which state?
Another Texan,
You may have leased way below their budget and/or for too short a term to protect the original investment.
Another trick being used out there is to acquire long term Niobrara rights to sell into a demanding market for potential energy packages. Remember the packaging of home mortgages a few short years ago to meet the demand for investors? Or the popular "flipping" of houses in a rising market? There is strong demand to have a position in the "ol biness"
If you sit tight and get some good advice about the physical asset you have, you will eventually realize the true value of your mineral asset.
I think you are right on, Gary. I am a retired geologist/geophysicist, so have a pretty good idea of what I have there. In fact I have developed a good looking play in the proximity of my minerals...looks a lot like Brandon Field. I've shopped it around a little, but no takers yet.
Gary L. Hutchinson said:
Another Texan,
You may have leased way below their budget and/or for too short a term to protect the original investment.
Another trick being used out there is to acquire long term Niobrara rights to sell into a demanding market for potential energy packages. Remember the packaging of home mortgages a few short years ago to meet the demand for investors? Or the popular "flipping" of houses in a rising market? There is strong demand to have a position in the "ol biness"
If you sit tight and get some good advice about the physical asset you have, you will eventually realize the true value of your mineral asset.
Gary L Hutchinson
Minerals Management
I, also, have received calls from Haggard Land Company. The first call was about a month ago and the offer was about 4.5 times the lease price for several hundred acres in Kiowa County, Colorado. Then, approximately 3 weeks later the same landman -- who previously said he would never call me again, blah, blah, blah -- called me again and upped the offer to approximately 5.5 times the lease price. The guy from Haggard said he would have offered more if my royalty percentages were higher (they are 12.5% and 15%). He told me that I leased too cheaply. That tells me that he wants to package and resell the acreage. Just like Gary said. The landman from Haggard was extremely pushy and somewhat insulting. Reminded me of a used car salesman in tactics.
Prior to the calls from Haggard, I received a different offer from another land company offering approximately 4.5 times the lease price. I'm still hanging on, but can't help but wonder, as we all do, when/if the drilling will begin.
It will be tempting to sell and many will do so rather than wait on drilling depending on their situation. Just make certain that you know your personal opportunity cost of holding so you can compare to these bids, then never rely on the purchase contract as being fair to you. GET A MINERAL ATTORNEY OR OTHER PROFESSIONAL TO ADVISE YOU, in order to get what you want and need in a deal. If there is a lot of money involved, you are better off to have your attorney write the Sale contract. Have a plan as to what to do with the money to meet your needs and those of Uncle Sam.
This is a "greater fool" game. Don't be part of the chain of greater fools. As the owner, you don't have to do it.
"There is one born every minute" doesn't have to apply to you.
Good advise just posted by Gary Hutchinson. I would hold on to your minerals, Brooksye, unless you get an offer you just can't refuse or really need the money. Then follow Gary's counsel. As to drilling...there isn't a lot of activity in Kiowa County right now. The last well permitted was in mid August, so they may still be following up on those permits. The Niobrara shale that is the hot play in the DJ Basin north of us, doesn't exist in most of Kiowa County. There are other good objectives, however, but they will be a lower proirity. I think drilling will continue in Kiowa County, but at a slower pace than to the north.
Brooksye S. Gertsch said:
I, also, have received calls from Haggard Land Company. The first call was about a month ago and the offer was about 4.5 times the lease price for several hundred acres in Kiowa County, Colorado. Then, approximately 3 weeks later the same landman -- who previously said he would never call me again, blah, blah, blah -- called me again and upped the offer to approximately 5.5 times the lease price. The guy from Haggard said he would have offered more if my royalty percentages were higher (they are 12.5% and 15%). He told me that I leased too cheaply. That tells me that he wants to package and resell the acreage. Just like Gary said. The landman from Haggard was extremely pushy and somewhat insulting. Reminded me of a used car salesman in tactics.
Prior to the calls from Haggard, I received a different offer from another land company offering approximately 4.5 times the lease price. I'm still hanging on, but can't help but wonder, as we all do, when/if the drilling will begin.