I am new to this site, and also to owning mineral rights, but does anyone know the turn around time, when a company wants to do a top lease on your mineral rights?
please explain "turn around time".. time between offer and $$$, ???
Well, we are waiting for a 10% down on the bonus lease, and after that, I was wondering how long it usually takes for it to be final after that, to receive the final payment. Also, do you know what they are selling for right now in that area? I believe its Section 1-18-13.. Thank you
Jennifer,
There are a few reasons to sign a top lease but NONE of them benefit the mineral owner. In fact, top leases often create a liability for he mineral owner thereby creating risk with no chance of a fair reward. you are in an active ares where owners hold the cards but must play the cards well to get a fair shake. Hopefully, the 10% payment will not be made and you can get out of the top lease.
Gary L Hutchinson
Minerals Managment
To lease, then sell minerals in my opinion is poor strategy. When you lease you are transferring 75%-83% of what you wish to sell to someone else with the mere "Possibility" of reversion. Unleased you have 100 eggs to sell, after you lease, you have 17 to 25 eggs to sell. Would you pay as much for 17-25 eggs as you would for 100? I wouldn't either!
This is not even considering if the buyer intends to lease the acres themselves? Do you really think you can negotiate a lease equal or superior to someone who does it for a living? The 17-25 eggs you have left are further devalued but the most likely, less than optimized lease.
If you are going to sell, sell unleased acres. If you are already leased? Wait for the lease to expire and then sell if no drilling occurred. If drilling has occurred? Then collect at least the first 2 years royalty because collecting a little royalty seems to have no effect on the sale price of the acres if you are selling the remainder of oil in the ground which is the only reasonable basis I can think of for selling minerals.
I recently received one of the mass mailing letters asking me if I would consider selling and this time on a whim I replied, saying that if they would like to make an offer I would look at it. The next message they asked for my statements from the operator? I informed them to please take me off of any lists they may have because if I sold I would be selling the oil remaining in the ground and not just my revenue stream and throwing production of future wells in for free.
Mr. Hutchinson frequently suggests that people form a strategy for maximizing their upside from their minerals and I don't believe you will find better advise than that. Everyone should have a strategy and not trust to luck. I hope this helps.