# Possible sale of mineral acres
**URL:** https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761
**Category:** Reeves County, TX
**Created:** [October 17, 2017, 6:12pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761 "2017-10-17T18:12:17Z")
**Posts on this page:** 8
**Page:** 1
### Author:  [@Mel\_Gierhart](https://www.mineralrightsforum.com/u/Mel_Gierhart)
#### Post date: [October 17, 2017, 6:12pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/1 "2017-10-17T18:12:17Z")
We have an estate member that is possibly interested in selling all or part of their mineral acres for the following locations: Block 13, Section 179 (approximately 14 net mineral acres) and Block 51 Township 8S, Section 27 (approximately 4 net mineral acres). What is the going rate per net mineral acre for these locations?
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### Author:  [@BP1](https://www.mineralrightsforum.com/u/BP1)
#### Post date: [October 20, 2017, 11:02pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/2 "2017-10-20T23:02:52Z")
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### Author:  [@M\_A\_Smith](https://www.mineralrightsforum.com/u/M_A_Smith)
#### Post date: [October 22, 2017, 7:20pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/3 "2017-10-22T19:20:01Z")
Depending on how well the existing well does, the operator could drill additional wells. With the “winerack” design for multiple stacked horizontal wells, there can be room for quite a few. On one of the properties, the operator plans to drill 16-20 wells. Eight parallel wells would be in the upper Wolfcamp, seven wells would be interspaced below, and possibly eight more below that in the middle Wolfcamp, providing income for many years to come from the section. Four wells have already been drilled, and the average ultimate production is projected at just over 1 million BOE (half gas, half oil). Depending on how soon the subsequent wells are drilled, I calculate that each nma will provide about $40-50k (net present value using a 10% discount rate) at current oil/gas prices after severance tax. We were offered $30k per nma to sell, but refused. In addition, income taxes can be more favorable on the long-term revenue from production than on the up-front money received on a sale of minerals.
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### Author:  [@John\_O\_Neil](https://www.mineralrightsforum.com/u/John_O_Neil)
#### Post date: [October 24, 2017, 2:15pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/4 "2017-10-24T14:15:05Z")
It would be interesting to see your calculation regarding the tax side of this. Without doing so myself, my first thought would be that selling would result in long-term capital gains tax, while royalty income would be subject to ordinary income rates. Not challenging you on this at all… just my first reaction.
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### Author:  [@BP1](https://www.mineralrightsforum.com/u/BP1)
#### Post date: [October 24, 2017, 2:25pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/5 "2017-10-24T14:25:48Z")
John,
Depending on where you are situated in the tax brackets, and where selling minerals would then put you, it could be advantageous to reap the royalty stream. If you have a lot of minerals, and are within the 15% tax bracket currently, then that sale could push you into the 25% or higher brackets. Even though long-term gains are taxed at “favorable rates,” meaning less than your “ordinary income” taxes, you could pay more up front in taxes than if you took royalties because of the change in tax brackets. However, this all depends on multiple factors. There are scenarios where you would actually save tax money by taking the up-front lump sum. For instance, if a mineral sale doesn’t affect your bracket, then you would be taxed lower on that up-front money (“favorable rate”) as compared to steady royalty income that would be taxed as “ordinary income.”
If you want to know more, message me. There’s a lot of ways this could play out, and every factor can change the outcome.
Best regards,
BP
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### Author:  [@Sharon\_Rutan](https://www.mineralrightsforum.com/u/Sharon_Rutan)
#### Post date: [November 1, 2017, 6:47pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/6 "2017-11-01T18:47:30Z")
Hello,
We have a couple leasing/buying companies that have been making us offers on our SE/4 of Section 136, Block 13 in Reeves County, Texas.
So far the highest lease bid is $3000.00 per net mineral acre as a one-time signing bonus for a 3 year paid up rental and a 1/4 royalty on the marketable oil and gas for the life of the well.
We’re pretty sure that’s a low ball offer.
Any information would be appreciated.
Sharon R.
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### Author:  [@Mel\_Gierhart](https://www.mineralrightsforum.com/u/Mel_Gierhart)
#### Post date: [November 1, 2017, 6:59pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/7 "2017-11-01T18:59:31Z")
Sharon That sounds like a lease offer. I do not know what the current leasing rate is for that area. The estate leased Block 13 Section 179 to Primmex a couple years ago and now have a permitted well. I think the lease was $2500/acre, 1/4 royalty, for 3 years with 2 year option.
The estate member recently had an offer of $8,500/acre to buy, which I think is low. I don’t know what they have done as far as selling goes.
Mel
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### Author:  [@MRFAdmin\_SV](https://www.mineralrightsforum.com/u/MRFAdmin_SV)
#### Post date: [January 11, 2025, 5:10pm UTC](https://www.mineralrightsforum.com/t/possible-sale-of-mineral-acres/1761/8 "2025-01-11T17:10:52Z")