My family has under 50 acres of mineral rights in Dimmitt Co., we signed a contract with a company for them to explore our area along with neighboring properties. It has been some time now. In the mean time I just received an Offer from another company to Buy our rights for $350,000 total. Knowing how 'hot' the area has become but will eventually 'cool' what might be my best option at this point of time. Sell the Rights or hang on for the 'paydirt' to happen?
Mr. Lewis, many times these offers come shortly before a well is drilled , sometimes just before the division orders are sent out. I'd make certain that you do not already have a well before considering any offers. If all the family members separately have the right to dispose their mineral interest as they see fit, then everyone can make their own decision, some sell and others not according to their situation. As my friend Mineral Joe has often said, there is no guarantee and you may counter with an offer to sell half to spread your risk, after you are sure you don't have a well you havent been informed of yet. If someone else has that much interest in your minerals, a second offer could not hurt. You could list your minerals on the homepage of this site to see if you get other offers.
Appreciate your advise and will mention to the rest of the family. For myself am still willing to 'take the chance' and wait. It does seem interesting how some companies are getting more eager to acquire one's rights as we move further into this development in the area. Thank you. H. Lewis
Hardy:
I agree with Mr. Kennedy. The company offering to buy, generally has access to information that you may not be aware of. If they are offering $350,000 as a first offer, you can bet that they know something is happening or about to happen in your mineral area. I have had the same scenerio happen to me in North Dakota and as usual, I trashed the offer. Less than a year later, a well was drilled on this area. Try to do some research, if you are considering this offer as you may regret you decision a year from now.
Thank you Mr. Mallory, that is exactly what concerns me. As to researching what is happening in the area I have found 'tight lips' from all sides. Even neighbors, who have benefited from these events are reluctant to share with anyone outside their circle. But I'll try one more time. Good day to you.
Hardy:
You might want to contact the RRC of TX in regards to information on any recent seismic tests conducted in that area.
Hardy C. Lewis said:
Thank you Mr. Mallory, that is exactly what concerns me. As to researching what is happening in the area I have found 'tight lips' from all sides. Even neighbors, who have benefited from these events are reluctant to share with anyone outside their circle. But I'll try one more time. Good day to you.
How can I find out what the Geophysical survey results that was done on all land in my area a year ago?
This is in Nacogdoches County, Texas
Elaine:
My experiences with getting info on seismic surveys is that the operator who has paid for work, is normally not willing to devulge the information. I was previously referring to finding out if and when a survey was conducted but getting the results is a different story. Some operators or companies might be willing to give some insight into the seismic results but I have never dealt with one of those.
Elaine Callahan said:
How can I find out what the Geophysical survey results that was done on all land in my area a year ago?
This is in Nacogdoches County, Texas
The guys here offer good advice. Also $350 does sound very low for Dimmitt County depending on location. One thing to consider is that it's always a pig in a poke, well there are exceptions like in most areas of the Bakken you know, with exception to operators, what production will pretty much be, but in other places it can very dramatically. They just hit a well close by where IP was over 1000 bopd, they went across the road and hit an 8 bopd well. If you own the 8 bopd minerals they will probably not come back any time soon and drill another well, probably for another 20-30 years just as it was since the previous well. By doing nothing, It can be like going to Vegas and putting it all on red. Even if one ever decides to sell, if you have very many acres don't sell it all, it may land on red. Tell your family don't sell Dimmitt for $350 per acre, tell them to do like the guys here said and investigate any activity and then if they decide to sell tell them to take offers. Some locals here accepted $400 per acre when I would have paid them $1500 per acre.
Hardy, careful with those 'letters to buy' - often times they send that same letter out to everybody in and near an active drilling area (no matter how many acres you have, or where they are) , just to get you to respond (to the large amount of money).
First and formost, realize that you'd be selling ALL your minerals FOREVER, including ones we don't even know about today, but might discover in future!
Once you reply to them, THEN they start to look at what you really have, and often times they'll make up some bogus excuse and say, 'hmmm, we made a mistake, it's not really worth $350k, but we'll give you $200k' . . . They'll try to size you up really quick, and see what they can get away with. Sometimes not - but one thing is for sure, that most times they'll be offering a FRACTION of what it's really worth.
You really need to find out what is going on nearby, and try to get an idea what to expect near term. If you have family/ potential heirs, then 'selling' will cut them out forever, so you'd really need to consider the short-term quick-cash gain -vs- the real long-term cost.
I am curious oldoak how you know they would be selling minerals they don't know they own as anyone with any common sense would only sell the tract they are being paid for, how did you come up with that and you really think a seller has to sell ALL they own, is this a must, they can not sell 1/2 or 1/4, that sounds frightening. I guess it would have been nice if all my deceased relatives would have thought like you and left everything for me rather than lived for themselves. I always told my parents to spend everything they have before they pass and enjoy life where I see other families actually fight each other over inheritance and believe they are owed something. Facts are always more helpful than fiction.
I must say I'm rather taken back by the 'stimulating' comments my little inquiry started. I do appreciate everyone's thoughts and feelings, having decided to hold on to what we have and wait for the final verdict. I thank each of you for this discussion. It is beginning to 'heat up' and we should all sit back and hope good things grace our laps if Fate wills it. Peace and Prosperity to one and all. Hardy
Sorry if this was confusing when I wrote "including ones we don't even know about today, but might discover in future!" what I meant was the minerals at depths; like if you sell based on what it's worth for the Eagle Ford Layer, then you find out later they discover at the Pearsall depth it is worth 10x - you don't get anything - you sold - those are the 'future' minerals I meant.
and yes, you don't have to sell ALL the acres you own, but I was warning that ALL the minerals (at all depths) for the acres you do sell will be gone forever. Like other posters already mentioned, if you need some $ now, you can sell a portion of your nma, (or percent share) however you wanna do it.
Mineral Joe said:
I am curious oldoak how you know they would be selling minerals they don't know they own as anyone with any common sense would only sell the tract they are being paid for, how did you come up with that and you really think a seller has to sell ALL they own, is this a must, they can not sell 1/2 or 1/4, that sounds frightening. I guess it would have been nice if all my deceased relatives would have thought like you and left everything for me rather than lived for themselves. I always told my parents to spend everything they have before they pass and enjoy life where I see other families actually fight each other over inheritance and believe they are owed something. Facts are always more helpful than fiction.
They have no well now and the way I see it the discovery will be when they do. I've seen many discoveries peter out before they get to you. Normally when you sell something it is understood, you sold it all but I have seen may times where they sell a formation or depth and where they sell for a term like 10 years.
Your most important criteria is determining which company is involved in the transaction. If the company making the offer or operating is either Chesapeake or Samson, and you accept, I suspect you will become extremely unhappy. Both individually, and/or through at least one of my entities I have dealt with each company. Because of what happened with respect to each company, I promised myself to never deal with either company again.
David Myrick, Jr.