Hi, my family is wanting me to sell a farm that we have 4 active wells on. I think I am OK with selling the land, but keeping the mineral rights. However, is there anything I need to be concerned about? Anything to watch for? We've only been 4 months into production so I really just don't want to rock the boat and make any changes, but I'm getting pressure to sell.
I don't forsee a problem but if you have a realtor list your property you can have your own trusted RE attorney scrutinize the deal before you finalize it. Call it cheap insurance for a few hundred dollars. I have seen the issues at closing that make people scramble and that is to be avoided. Congratulations on your wells.
Why sell the land, why not rent it out and make some money on the rent, land isn't the worst investment.
Dear Greg,
I would advise you to put your intention to reserve the minerals AND mineral rights, not just mineral rights (in some people's minds, they are the same thing, not mine), directly into the SALES CONTRACT (as well as the Deed, obviously). Don't forget to do that! If you don't put it into the Sales Contract, and then you show up at the closing with a Deed that does make that reservation, the Buyer is going to be able to argue very convincingly that the Deed does not comply with the terms of the Sales Contract.
I would advise you NOT to convey to the Buyer your executive rights as a sop so that they "can have some say or control about what happens on their property." I have heard Buyers make that exact plea before several times, and the Seller just cave in, especially if they know each other. Not a good idea, especially not for a tract with producing wells or with the potential for leasing and production in the future.
I would advise you that most realtors and banks, and even some title companies, are completely clueless about minerals, and often won't admit it, so they are capable of telling you just about anything if it suits them. I know because it happened to me, my realtor told me the mineral ownership was a certain way, but it turned out to be totally different. Don't trust a single thing a realtor says about minerals, confirm everything. For a large tract with producing wells, I would definitely hire an attorney.
As far as "possibly keeping some of the land," to benefit from what can be surface damages per acre significantly in excess of what you might otherwise expect to be paid per acre for the raw land, the only thing is that you already have four wells on the property and presumably already have been paid for those pad sites. So unless you have a very large piece of land, how many more pad sites could they possibly cram in there? Furthermore, there is no way to know for sure what pieces of the surface an Operator will decide to use in the future. Existing permits would give a clue, but there is no legal obligation for the Operator to follow through on a permitted site.
And as far as the new surface owners' being able to disallow new wells, they don't get to do that unilaterally, nor can they do so effectively by demanding exorbitant surface damages. If the Operator offers the same or substantially the same amount of surface damages for a new road or pad site as they did for the four other wells, then there is nothing the surface owner can do about it (absent some detail in the Deed or Lease to the contrary).
P. W.
Greg, one piece of advise:
If you are using a realtor to sell the land do not let them or your family members pressure you into tossing in some mineral rights and/or wind rights in order to sell the dirt unless you are wanting to sell some mineral rights and/or wind rights too. The realtor I had whined that it was the only way to get a buyer for the dirt and tried to convince us. You have to decide if your mineral rights are worth more than dirt to you. We still own the dirt for now. Good luck selling yours.