Sale of producing interests

General Mineral Rights Discussion
1

We have decided to sell our producing royalty interests in two very productive counties in West Texas. We have received several unsolicited offers; however, I would like to approach other qualified purchasers as well to help establish and/or substantiate value. We have not sold any of our interests previously, and I would like information on two items: (1) How to proceed legally through a sale (i.e., proper closing procedures, etc.), and (2) How to qualify and/or vet offerors. Any advice would be greatly appreciated!

Jim H

2

You can contact me diectly if you would like to receive an offer. Dan Dan.haake@haakecpa.com

3

Hi James!

I normally advise people to not sell their minerals, but have come to recognize that sometimes circumstances make it necessary or desirable.

As far as procedures, first you need to find a Suitable Buyer. There are hundreds of companies and individuals out there that will be happy to make you an offer, but many will try and "low ball" you into accepting a lower price than a more legitimate Buyer would offer you. Some will try and buy your interests only to "flip" them to an End Buyer for a profit.

Once you have found a Suitable Buyer, that Buyer will present you with either a Letter of Intent (LOI) or a Purchase-Sale Agreement (PSA) setting out the agreed upon terms of the sale and setting a Closing Date.

The Closing Date will be far enough in the future to allow the Buyer time to check the title to your interests. It is the Buyer's responsibility to do so.

If there are any title issues that need to be cleared up before the conveyance can be completed, the Buyer will have a certain number of days to inform you of those issues and you will have a certain number of days to correct or "cure" those title issues before the closing can proceed.

If there are a number of properties involved, sometimes the Closing Dates are staggered to allow the Buyer to have time to check and clear the various titles.

There will be a certain amount of money, a few percentage points of the total sale price (5% or so), that the Buyer will pay you or place in escrow with an agreed upon Attorney or Title Company to hold the property while they check title. That sum is typically applied to the total sales price in any successful closing. Sometimes it is non-refundable if the Buyer backs withdraws their offer for any reason other than title failure.

Beyond all that, you just agree upon a selling price and sign the Mineral Deed.

I have successfully assisted a number of people who have met me through The Forum sell their minerals, not only helping them locate reputable Buyers, but also finding them greater sales prices than they had previously been offered.

If you need additional assistance, accept my invitation to become "A Friend" on The Forum and I will be happy to discuss that with you privately.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

4

James -

One thing I should add is that it would be wisest if you were to consult an experienced Oil and Gas Attorney for anything like this.

If you do not know one, there are a few that assist people on The Forum. Or I can suggest a few to you.

Charles

5

Hi Charles,

Thank you for your response. The information was indeed most helpful. I would like to go forward either by visiting with you in person or by separate email...thanks again.

6

Hey James -

I noticed that you are in McKinney, which is just a few minutes down the road from Fort Worth.

Meeting me is what I will always describe as rather anti-climatic, but I'd be happy to meet with you anytime.

The reason that I previously mentioned your accepting my invitation to become "A Friend" on The Forum is because The Forum Constabulary very rightfully frown upon solicitations by Buyers and Brokers preying upon their "Civilian" Members. It is a practice and standard that I very strongly support.

By accepting my invitation to become A Friend on The Forum, we could share our personal contact information and proceed from there.

The process to do so, however, can be a little confusing. I know because I've tried it.

I have only done this a very few times, because I do not want to ever be in trouble with The Constabulary, but since I am not soliciting any business from you I am going to once again very gingerly step out of my Comfort Zone and allow you my personal contact information on this, the "General Page" of The forum:

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

fieldlandservices@gmail.com

713-408-2850

I truly hope this doesn't land me in Casa de Bow-Wow with anybody!

7

Jim -

Cash flow around here has been slow to non-existent the past few months, so I have switched to a less expensive phone service.

I'm keeping the numbers I have had for years, but until something breaks I will be using the following number for voice communications:

682-249-7144
I don't know if it accepts Text messages. Guess I'll find out.
Looking forward to visiting with you.
Appreciate your understanding -
Charles