I am wanting to know, when selling a portion of my mineral rights is it normal for the oil
company buying to take over two months to close the deal? My lawyer and I have bent over backwards, adding a clause here and changing the wording several times. Twice all necessary paperwork has been put in front of their faces, but they've yet to sign or send monies.
I guess I'm really wanting to know how long should I give them to get their act together
before I move along to another company? I'm totally fed up with all these postponements.
I realize most of you don't have experience selling, but hopefully someone can give me some
insight, as my lawyer doesn't have much to say.
Thanks, susf
Are you certain you are dealing with an actual buyer and not just someone trying to sell your mineral rights for more than you agreed to sell them for? They take your paperwork to the potential buyer , collect the purchase price, send you your price and keep the difference. They may be experiencing some difficulty in selling your minerals themselves if they are doing an OPM deal. There are alot of people in the oil business that want to do "Other Peoples Money" deals, they get paid if it works and never had a dime of their money at risk. If there is no dispute of title, I would be suspecting the OPM angle. I would explore other avenues if you have not committed yourself to these people through an option.
Another thought occours to me, possibly they are waiting for something, a well to start producing, a new well to start drilling, many possibilities. The only thing you can be sure is that they have asked for changes to the sale paperwork more than once, you have complied and they did not close the deal. These might not be real buyers.
It sounds like they no longer have a serious interest in buying your minerals.
I would agree with Mr. Kennedy. They've had plenty of time to close. Give them a firm date to close in writing or the deal's off. If you want to sell minerals, there's other ways to do it where the closing process is a lot cleaner.
Susan,
To restate comments below, I believe you are not dealing with a legitimate oil company buyer. If the buyer can't steal it or already have a home for the purchase they just go elsewhere. A similar situation happened to a client in Reeves interested in getting a fair value for his minerals. When he made a counter offer acceptable to him, the line went dead.
Areas of Reeves are highly prospective for very very good wells. If you are truly interested in raising some cash, determine the value to the real industry not the land speculation industry,, compare it to what helps your lifestyle and approach the geology department of an established operator. You may be pleasantly surprised by the reaction.
If an unsolicited offer comes from other than a known operator, be suspicious. It will not be made in your best interest.
It sounds like she has retained counsel, and she called it an oil company. Based on the facts that she presented, it would appear that they no longer have any serious interest in buying her minerals, given the time frame that she quoted.
Susf, would you mind naming the company? Is it a well known oil company?
You and your lawyer have gone out of your way to satisfy the changes they wanted. Correct?
They still won't close. Well, I would try to find another buyer.
Susan,
It took us almost a year to finalize our lease with Devon, but when I sold half of my mineral rights, it took less than 2 weeks.....but every sale is different.
Tom
I can refer you to someone who can do this in 2 weeks. This is "normal behavior with some". My brother in law sold for almost $500,000. He was sleeping like a baby within 2 weeks.
Here is how it is supposed to work Susan. Anyone who shows interest should send you a portion of the money up front. It is usually about $10,000 earnest money to show their serious intentions. If they back out, you keep the money anyway. We gave our buyer 30 days, they came through in 2 1/2 weeks but things happen. The buyer should be in constant contact with you. We had the papers drawn up by the buyer (in Austin) then had our lawyer look at it. It was simple and straight forward. I can give you this guy's number.
Most do not give you earnest money and why would you want them to if they close in a normal amount of time which would be around 2 weeks. How many times can you count that you know buyers giving strangers money to hold, 10k you mentioned, up front? I close in days when I purchase but it should never take more than 2 to 3 weeks to get title work done and close. The last deal I did they lived on the other side of the US and I closed that day. At $500k you'd probably want to meet at an attorneys office.
I suspect the answer would be that the buyer wanted it and did not want us to sell it to someone else while they got the $500,000 together. They showed that they were serious and not just promising and selling snake oil. It worked. I was explaining what we got when our elder family sold to an honest company who came through as they were supposed to in a timely manner. It took 2 1/2 weeks. They were committed. Why not? When I buy a home, they request earnest money. And no they did not meet at an attorney's office since one was in Texas, the other near Canada. It was wired, then our relative sent the original deed overnight. All is well.
I know a lot of people disagree with selling but there are many circumstance where one wants to and needs to. It is a very complicated answer and "never sell" is not always appropriate. Age, circumstances, dreams, health etc... are many factors involved. I for one, may be selling half of my interest and keeping half. That is one way to do it and get much money up front to enjoy. Do you want to buy a dream home? Add on? Have a child in college or do you want to travel the world? Our elder brother wanted to travel, enjoy life to the fullest and he is doing it. Others fret about dry or mismanaged and complicated wells and where will all this be in 30 years, only to be mistreated by oil companies and a lot of greed. It is your life, take advice but do what you need to.
I agree with you that there are intelligent reasons to sell. I think to diversify is intelligent also. To do nothing leaves one hoping to be lucky. When putting up earnest money with real estate the money is placed in an escrow account not just "send you a portion of the money up front" to a stranger, big difference who holds the money. I bank wire most out of state payments but normally I'd hire an attorney or intermediary in their city to wire it to where they pick up the money and sign the deed. I have one now I wired to them personally and they never sent me the deed. You do give great advice as no one can predict the future, enjoy the life you have and as Cramer says, pigs get fat and hogs get slaughtered. Also, am I diversified, don't hope and pray your one tract will produce a gusher someday, spread out.
Of course, due diligence is always intelligent. I did say my brother in law had an attorney. Of course! I am sure the guy who sent $500,000 did also. I am at times a little aggravated with the standard "don't sell" attitude on most forums. We sold some, someone in our family sold all. That makes neither of us wrong. This lady had a question about selling, not keeping. Let me give you an example. This sold well was frac'ed / producing when brother sold. La Salle County. 400 barrels per day, not much gas. $500,000 for 25% of 40 acres at 25% royalty. It will take that buyer a VERY long time / years to get his money back. My relative is sitting pretty. The only hope this company has is that there will be multiple wells. As stated before on this forum, the risk is huge on both ends. To me, it all depends on how old you are and whether you want to "save all" for your relatives in your will.
Hi Susf -
I have been in the oil and gas business for over 30 years, and have helped many people sell their minerals. If the Buyer you have placed your minerals to sell to has postponed your closing date by 2 months then I would suggest that there is a problem with his financing. Also, be very careful that you know how they will pay you. Will you be paid with a certified bank check? or will you be paid with a bank draft? There are many questions that you should probably ask upfront so as not to create any concerns when you expect to close.
I would suggest that you try and find someone else to help you find a buyer who commits to a closing date and closes when agreed to. To me, the situation you described, sends up a red flag.
Best of luck. If you would like to see what others have to say about working with me, please visit my website at: http://www.iliosresources.com where "got minerals?" is treated with utmost respect.
Is this where we place our web page advertising. I will tell others to place all their web page advertising here.
Mineral Joe is right. Advice and a referral is one thing outright solicitation is another and against the rules. The website link should go. To the seller: Don't take anything but a bank wire transfer and a down payment up front if your paperwork is in order. The seller has the law on his side so he should not be overly concerned. it is done all the time. 'nuff said.
Never should take that long call me , I am interested
Hi EM
I am in the same situation trying to sell part of my mineral acres in the Eagleford Shale near Kenedy, Texas!
can you give me the names of any legitimate companies that might be interested in purchasing?
Regards
Shirley
E. M. Cook said:
Here is how it is supposed to work Susan. Anyone who shows interest should send you a portion of the money up front. It is usually about $10,000 earnest money to show their serious intentions. If they back out, you keep the money anyway. We gave our buyer 30 days, they came through in 2 1/2 weeks but things happen. The buyer should be in constant contact with you. We had the papers drawn up by the buyer (in Austin) then had our lawyer look at it. It was simple and straight forward. I can give you this guy’s number.
Shirley,
As with any asset you own and want to determine its value for sale, find someone in the business to provide an evaluation of the value of your minerals to the industry then compare that to your needs and expectations before setting your price. Sorry, but there is no "Blue BooK for mineral properties as there is for cars because every mineral deposit is different and viewed differently by those with demand for minerals. Once you know the value to you, hen take your offer to sell to buyers that may have a need in your area.
Contact Dan Buchignani, Elizabeth Honey, Don Cantley or Clint Liles all members of MRF that have been involved in the evaluation and sale decisions process of Texas minerals.
Shirley Braune said:
Hi EM
I am in the same situation trying to sell part of my mineral acres in the Eagleford Shale near Kenedy, Texas!
can you give me the names of any legitimate companies that might be interested in purchasing?
Regards
Shirley
E. M. Cook said:
Here is how it is supposed to work Susan. Anyone who shows interest should send you a portion of the money up front. It is usually about $10,000 earnest money to show their serious intentions. If they back out, you keep the money anyway. We gave our buyer 30 days, they came through in 2 1/2 weeks but things happen. The buyer should be in constant contact with you. We had the papers drawn up by the buyer (in Austin) then had our lawyer look at it. It was simple and straight forward. I can give you this guy's number.