Profitable to sell rights? Only an acre... Brazoria County, TX

General Mineral Rights Discussion
#1

Details are very vague to me about my mineral rights because I had no clue I even had them and I live in another state and don't talk to the family that owns them too...and I know nothing about how it works, I'm 24...

But what I know is, I am 1 of 9 people that own mineral rights to a 10 acre of land in Brazoria County.

3 years ago I leased them for $150 signing bonus for 3 years... From Eli Smith & Assoc.


I guess my sister and I got $150 and the others only got $100...

They have come with a renewal and I am wondering what to do ... I have not gotten the renewal yet to know what it says- but my sister said it's pretty much the same except they want to lease for 3 to 6 years, no definite amount.

I desperatly need money right now and I wonder if I would get anything substantial if I sold now instead of maybe getting royalties years from now...

Also, who would I sell to? Eli Smith?

Once I get it, I can post details of where it is and exact terms...

Any advice would be great! Thanks!

#2

Probably not much to be gained from selling. I would lease it again in your position. You might try to negotiate a higher lease bonus though. I don't know the going rate in your area but if it's worth anything I would think it's worth more than $150. Good luck

#3

Thank you, r w kennedy...

Ok so I just received the renewal

It says: Re: 10 acres of land, more or less, being lot 29 of the Wellman Subdivision, out of the A.C.H. & B. Survey, Section number 25, A-412, Brazoria County.

They want to extend the lease to 6 years (was 3 originally)... but still only giving a $150 per net mineral acre bonus money consideration. Which I find kinda crappy seeing as they are getting 3 more years...

I have to find the original lease to find how much percentage of royalties and all that they were giving...

If I wanted to sell, what's an approximate amount I'd be looking to get, if any?

Also, how would I find out the going rate for that area?

#4

Long term leases (more than 3) year's went out in the 60's along with "wing tipped shoes".

A $150 is not going to make, break or help anybody. Just pretend you don't own them and something may good or great come from it in the future.

#5

So what happens if say me and my sister don't sign the lease (she's right there along with me on thinking it's a crappy deal), they cannot do anything further with the land unless they had all 9 signatures? Correct?

#6

The company can't do much with the whole tract without you and your sister signing a lease. They can threaten you and your sister about "force pooling" and "cutting you out of the unit", but it's cheaper for them to just go ahead and pay you than spend many thousands' of dollars going through the legal process that they know that they are not going to win in the long run.

#7

I'm confused by your reply - couldnt they ignore the 9 acres & get the oil by leasing a larger tract next to it?

Walter Stewart said:

The company can't do much with the whole tract without you and your sister signing a lease. They can threaten you and your sister about "force pooling" and "cutting you out of the unit", but it's cheaper for them to just go ahead and pay you than spend many thousands' of dollars going through the legal process that they know that they are not going to win in the long run.

#8

When it gets down to leasing a very small interest it usually means several things.

Most likely the lease broker for the company is running up a big bill on the company that employed them to run title. Landmen make about $300 plus a day plus all kinds of expenses and run up big bills on the company that employee's them.

What do you think it is going to cost the company that employed the landman and his broker to run title and lease this tract? It's a lot more than the $150 per acre offered for bonus money, don't you think? Shouldn't the mineral owner be making more than this?

After all the minerals belong to the mineral owner and are not the property of the company, until they lease it.

If everyone on a tract leases to the same company it does not mean that they are going to drill on it. As, it does not mean that they will drill on the other tracts and exclude this one. It's simple, make they pay. If there are 10 mineral owners on a tract and only one does not lease, this does not mean that the company has tied your interest up. Like I told a land man about an interest when he told me, we have the other interest leased and you can't do anything without leasing it to us. I told him you can't do much of anything without my interest and I can lease to whom ever I want and you paid for an interest that is money spent that you can't drill on.

There's a lot more to this and it is not this simple. If a company is only paying $150 per acre for one net mineral acre interest on a 10 acre tract. The mineral owners have only been payed a total of $1,500 for the entire 10 acre tract, It cost a lot more than this to hire an attorney and file a lawsuit to try to force pooling an interest.

#9

Oy vey, this is so confusing. :(

So I take it if leasing it only gets me $150, selling it wouldn't be much more?

Should I maybe renegotiate the lease and see if we can get more? I just don't like the whole 6 year thing...

#10

We have not received royalty checks because I am assuming they haven't found anything. They had the land for 3 years and found nothing... ? All we have gotten was the initial signing bonus of $150.

I don't even know if they drilled during that time. The lady I spoke with said they are going to drill in January.

Also, does the fact I only own rights to such a small percentage lower the selling price? I feel like what I have is not much and maybe not worth much as well.

#11

Thanks

Yeah the lady was from Eli Smith & Assoc. who presented the lease...

I thought that was odd that there has been no drilling in all that time. And why would they feel the need to add 3 more years onto it? Does that maybe mean they think there is something there?

Is this the site? http://gis2.rrc.state.tx.us/public/startit.htm

If not, could you possibly point me in the right direction? I would love to look.

I do have all he location information.

#12

Amber, If you want to sell the rights it would be better not to lease them as this makes it worth less to a buyer. A buyer would rather use their own lease form or maybe not lease them.

Amber Dudley said:

Thanks

Yeah the lady was from Eli Smith & Assoc. who presented the lease...

I thought that was odd that there has been no drilling in all that time. And why would they feel the need to add 3 more years onto it? Does that maybe mean they think there is something there?

Is this the site? http://gis2.rrc.state.tx.us/public/startit.htm

If not, could you possibly point me in the right direction? I would love to look.

I do have all he location information.

#13