Offer to purchase surface interest only

Hi Mike,

I’m not a CPA but I do have a good idea of what you are taxed at. I suggest that you contact your CPA for more concrete answers.

If you are selling your minerals You will pay longterm capital gains tax which is anywhere from 15% to 20% depending on profit made from the sale. Long-Term Capital Gains Tax Rates in 2019

Production tax in Texas is 7.5 % for Natural Gas and 4.6% for gas condensate and oil, the operator will deduct this from your royalty checks. The Fed treats royalties as income which will be taxed at your income tax bracket.

See this post and thread Tax hit on mineral rights sales

Hi Moorehead and Mike,

I own minerals in Section 10, 11, 12 Block C-18 in Reeves.

There are several permits in the area from different operators to drill. Section 10 has a producing unit and Section 11 & 12 have permits. The area has been heating up quite a bit over the last 6 months and expect it will only see more activity.

Section 14 looks to be right above section 22 where there are several permits.

Based on the company wanting to purchase surface rights, I would guess they are looking to use the land in someway for the development of wells. Might be storage, infrastructure, who knows. This could also be a third party who knows they can flip those surface rights to an operator and make the money back.

My suggestion would be to hang-on to those surface rights and wait for a company to approach you to lease them. (You can also do homework and reach out to the operators to offer a lease.) In that scenario you’ll receive a leasing bonus, royalties (I believe) and also not be selling any future rights to the property.

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A lot of players are piling into the lucrative water game right now. (disposal/recycling/sourcing) They are likely chasing down the surface rights for Salt water disposal wells, frac ponds & water wells, or water treatment/recycling plants.

To all in this string, I am in C-18, section 4 south of most of you. Luxe has leased my 80 ac. mineral rights and MDC Energy LLC, and WaterBridge has leased easements for pipelines. So, the area is getting crazy busy. All the best, Navgoat

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Thanks everyone for the info it helps a lot. Especially when people are calling and emailing to tell you your interests are in a bad area you better sell quick for a low price.

You can make a lot of money with your surface rights. The company may want to put water wells In for fracking. .35 cents to .70 cents a barrel. Row’s " right of ways" for pipelines or transfer ststions could also make lots of money for you. If you have the mineral rights and surface rights, then your’e in the driver’s seat. Don’t sell just lease everything. Hire an attorney though, to review all leases.

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What value would you put on leasing surface rights versus mineral leases? Are surface rights valuable and are bonus payments made just like mineral rights? I received my first surface rights offer.

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There is a large water component to oil and gas development. Where y’all are, for every barrel of oil that is produced, 7 barrels of water are produced. This needs to be disposed of therefore companies acquire surface rights for water disposal. Moreover, fracing wells also has a large water component which the surface owner, assuming the rights are still in tact, can develop and sell water for oil and gas operations. Water midstream projects can be very lucrative but they also require hands on attention and operating acumen.


We do not own the surface rights in our section. I was under the impression that it is Public School Land.

My wife inhertited the farm( AB-1473) from her father. He grew cotton for years up until the mid 70’s.

Hi there - Are your surface rights a hard acreage, that is a hard divided interest? Or an undivided interest? That could effect how useful the surface is to any given company. We have surface rights in Loving county and have had a leased out to pipeline companies. I’d recommend holding on if you don’t need the money, the pipeline activity continues to heat up in the Permian and they could be worth more in leases in the next few years compared to a sale today.

Sorry I don’t understand your use of the word “hard”. My wife and her relatives own the surface rights to a 365 acre parcel – AB 1473.

Water, retention ponds

I own 30 surface acres in Reeves county section 14. Was offered a purchase amount that I’m thinking was very low and two land realtors confirmed. Anyone have names of companies that might want to lease that land?

You would have to give a better location with the abstract name and number.

I own 30 acres in section 14 block 45. Don’t know what I should expect to get per acre but they won’t lease it. The offer is low but I don’t know where to turn to lease it or get a better price for it. I’ve called operators in the area and had no interest.

Is the offer to purchase the surface only or surface and minerals?

Surface only. I don’t own minerals.

Correct. Personal Messaging exists only for special circumstances.