My family members have been approached to have our Lea County NM mineral rights purchased at an unusually high purchase price. In just 2 weeks, there have been 2 separate high offers. One cousin was told there was a big purchaser wanting to buy all the mineral rights in the area??? I am concerned if this is true, that it could be a foreign interest trying to control the oil production in the area. Are there other people on this forum who are having similar experiences? Or know of this mysterious buyer? Thanks
What may seem like an unusually high price to you may be a bargain for a buyer who is in the know. Or if you are lucky the buyer could be tremendously overpaying. Lea county covers a very large area and my guess is that most of it is held by production. This means that a foreign concern intent on controlling oil production in Lea county would also need to gain control of a number of large public and private corporations. If you provide a description of your holdings and what your were offered, there are some very knowledgeable forum members who might help you.
Need legals and more information to be able to help you
Depending on what kind of interest it is, a foreign entity may not be able to own it. If it is federal lands, you have to be a US citizen to own a contractual interest derived therefrom under the 43 CFR 3102 qualifications.
Also, a lot of buyers will fish, meaning they’ll send out outrageously high offers without doing due diligence, get the interests under contract by a binding Purchase Sale Agreement, then they will perform due diligence to determine the acreage to pay you on. Most of the time their initial offer is inflated as they over state your ownership. For example, if they think you own 10 acres and offer $10,000 an acre, your total offer would initially be $100,000. If during due diligence they find out you only own 1 acre, your total consideration would be $10,000, but you would be bound to move forward under the PSA you signed even though the total consideration was given a 90% haircut. Beware of this before executing a PSA.
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I would definitely like to hear more as I have unleased minerals in far eastern Lea, and I want a crazy high purchase offer.
I don’t think the foreign interest scenario is very likely. Unless you consider foreign to mean Texans or wankers from Wall Street.
Where are your minerals and who offered to buy them?
There are a lot of mineral companies which make many purchase offers in the hope of finding sellers. These are U.S. companies and individuals and not foreign. And they would all like to purchase big swaths of minerals where there is drilling going on to get good returns. Some hold the minerals and others divide the minerals into small lots for re-sale. Mineral owners need to keep on top of permits, forced pooling and drilling to evaluate any offer.
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