Mineral rights sale

Good morning,

In a mineral rights sale.

Can anyone tell me if a 40 day wait, after the mineral rights deed is signed over, to be paid for a mineral rights sale sounds right.

Nope. You should get a cashier's check or wire directly to your account at the time you turn over the executed deed.

Thank you Marcus. In the sale terms. It says within 14 days of signed sales agreement and mineral rights deed they will pay $1000 and the balance in 40 days or less. That didn't sound right. Is this common?

Hi Donald -

Some companies will issue a Draft (looks like a check but it is not) with a few days or weeks in it in order to allow them time to research the Courthouse Records regarding the title to your interests. That is not uncommon: No one wants to spend the money to check title without an agreement having been reached.

But 40 days sounds a little long to me. More like they want time to try and sell or "flip" your minerals for a profit before they close on your interests.

And the $1,000 down sounds vaguely familiar to me. They may be offering you much less than you can get for your minerals. Or maybe I should say much less than what they can get for your minerals.

If you will send me your legal description(s), I will be happy to look up the area and let you know what is happening "on the ground".

If you want to send me your description(s) privately, accept my invitation to become A Friend on The Forum and we can talk more privately that way.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

Thank you Charles,

The location is in Weld County Colorado. T1N, Range 68 West, 6th PM, Section 24: W/2.


801-W2SEC24T1NR68W6THPMWELDCOCOMAP.pdf (58.3 KB) 802-0512307665KERRMCGEEJOHNSTON1424.pdf (1.18 MB) 803-0512309175EXTRACTIONOGMILLER4217SISINCEJULY2011.pdf (1.15 MB)


The map of the area shows quite a number of Horizontal Wells that have been drilled in the area, but I couldn't find anything indicating any company's plans to drill Horizontal Wells in your Section. You could maybe call or write the Operators of the Producing Wells and ask them.

There was another Well, API # 05-123-09171, that I was not able to locate any data on. Apparently it was Plugged and Abandoned (P&A) sometime in the past and one of the other Wells, API # 05-123-09175, has been Shut In (SI) since July 2011.

There are 4 Wells still producing in your 1/2 Section, but none of them appear to have ever been very spectacular producers. They each appear to be down to only 1 or 2 Barrels of Oil Per Day (BOPD).

What are you getting in royalties and what are they offering you total?

798-0512319788KERRMCGEEJOHNSTON2224.pdf (1.17 MB) 799-0512323741KERRMCGEEJOHNSTONUU244JI.pdf (1.02 MB) 800-0512323743KERRMCGEEJOHNSTONUU2413JI.pdf (1.03 MB)

Great info.

Last month's royalty was $397 as It bounces around.

The offer is $6k an acre. As well as the 40 day pay clause. Also indicates that the sale is nullified and void if they fail to pay...sounds like a flip?


If you are satisfied that the total price is right for you, send the buyer a Purchase and Sale agreement for payment of a Lump Sum Amount by a date certain or there is no deal. Give the buyer two weeks maximum to check title and provide you with a Mineral Deed to sign. Take it to a lawyer to check about warranty's. Trade the executed deed for a cashiers check or equal. Everybody is happy and you will not have tied up your property rights unfairly.

If you are responding to an unsolicited offer, get an appraisal specific to your minerals before agreeing to a sale price. Fair Market Value is defined as a trade between an educated seller and knowledgeable buyer when neither is under external pressure. Buying and selling mineral potential does not have to be a zero sum game.

Friend Susan Reich through MRF. She is currently selling some Weld County minerals.

Gary L Hutchinson

Minerals Managment

Gary always has good advice to offer.

A Classic Flip. Not that there's really anything wrong with the concept, people do it all the time (Well, I don't. I don't know enough rich people).

It's just that he may be able to double his money when you could simply go to an ultimate Buyer on your own.

As to the offer of $6,000.00 an acre, how many acres do you own?

I was taught back when I had actually had dark hair, that to sell producing minerals interests you take the average of the most recent three months of royalties and, if the Wells have a projected or expected additional lifespan of under 15 years or so, you could multiply that average by 36 months as a place to begin your Negotiations. If the Wells have a projected or expected additional lifespan of over 20 years or so, you can multiply that average by 60 months as a place to begin your negotiations.

If you are averaging about $400.00 a month in an area where the J Sand and Niobrara, just to name the two, are productive, even with the 4 Conventional Wells currently producing only bringing in a few barrels a day, you could probably justify the 60 months.

$400.00 x 60 months = $24,000.00. How does that compare to the $6,000.00 an acre?

If you would like another offer or more I can send you the names of three people I know that buy minerals. I have known them for years (one is my nephew) and trust them completely. They may make you a better offer.