We are selling our land in Medina County Texas between Lytle, Natalia, and La Coste. The farm has 30 fenced acres of black soiled land, 10 oil wells- produced minimum of 1 barrel per day for the last 6 years, and the land sits on the Carrizo-Wilcox Aquifer (outcrop). There are also irrigation ditches in front and on the back side of the land. I am having a problem with pricing out the mineral rights, both water and crude oil. Can anyone give me an ideal of what the value could be? There are horses operating the wells that do not belong to the operator and 3 storage tanks (1 large and 2 small holding tanks). The appraisal I will be getting will not include the minerals and the realtor does not put a price on them also. There are also improvements for 2 home sites on the property. One site has well and city water, electricity, sewer. Not sure what the other home site has in operating condition.
Do you have a specific location (Section/Block/etc)?
Yes, I do, not with me right now. I can tell you it is east of HWY 471 and just north of HWY 463 and a couple of miles north east of Chacon Lake, that is now known as Chacon Creek.
I suggest that you keep your minerals and rights to ingress/egress for now. If this is the route you wan to go, then have your realtor include the new TREC No. 44-2 Addendum for Reservation of Oil, Gas and Other Minerals. If she uses a Farm and Ranch contract, the reservation verbiage is included in the document. There may be future mineral activity. Never know!
Keep it simple! Sell the land.
Good luck,
Pat
The water could be much more valuable than the land.
I agree! It looks like things are headed in that direction especially since SB 332 was passed. I thought twice about mentioning reserving groundwater rights and the following explains why:
If the seller wishes to reserve any portion of groundwater rights, it must be expressly stated and reserved in the deed. Secondly, anyone reserving water rights must consider how they will access the water, and thirdly, reserving water rights may decrease the market value of the land. This could put limitations on the purchaser's use of the land, ex., could the new surface owner drill a well to provide water to their house?
These are good reasons that prospective land purchasers should be careful to ensure that any deed, specifically, lays out their rights in the event the seller seeks to reserve groundwater ownership.
The San Antonio Court of Appeals addressed this issue in 2008 in City of Del Rio v. Clayton Sam Colt Hamilton Trust, (Tex.App. San Antonio 2008).
Good luck,
Pat
I merely meant I would consider the value of water to be equivalent to mineral rights in many circumstances.
I have zero argument with Ms. Malone's statements about the contract being detailed and specific.
If it comes down to it, a small parcel with two well sites is already restricting what a new owner might do with it.
I would engage a lawyer and not leave it up to a real estate agent.