To keep or not to keep mineral rights, that is the question

[msutti]

I’m putting up my 85.9-acre ranch for sale in Wilson County and unsure if I want to retain the mineral rights. The property is not producing or leased. I’m off of CR 536, 9 miles east of I-37. If I were to keep the rights and later decide to sell, what’s a major statistical wild-ass guess of the value of the minerals per acre?

[tracy_lenz]

So, if in the picture below the blue wells are drilled after the year 2000 and red is the oldest, here’s where your description is putting you: in a bit of a dead zone. My “MSWAG” (to use official terminology ) would be $200-$400/NMA. Do you own 100% of the mineral interest as well? Most ranches these days have fractionalized mineral interests, where someone (or multiple someones) left the mineral interest for multiple people to inherit. I would try to keep the minerals if you could in hopes something develops your way in the future, but the surface (especially that close to San Antonio) is likely more valuable, so no sense harming that sale if including minerals would sweeten the deal.

[msutti]

Thanks Tracy! I own 50% & the other 50% convey in 4 years as long as it’s not in production. I was surprised by the interest I’ve received for the ranch since I’ve put it on the market. A lot of folks are looking for a secondary bug-out place with the pandemic or simply making changes on where they want to live.

[tracy_lenz]

Yes! Anything within a half day’s drive of San Antonio, Austin, or Houston would be a great getaway ranch or a property for all the people wanting to homestead after the food scare this spring. I have friends here in Austin wanting to farm/ranch, and I know from them all the properties around Austin are seeing that effect. I’m personally a gardener and had the hardest time finding seeds in March for that reason too :-).

Funny how the same event driving your mineral value down (oil and gas prices from COVID) is driving your surface land value up.

I’ve also heard from multiple realtors regarding clients being nervous about not having mineral rights so close to the Eagle Ford activity since they’re wanting to use the land as a peaceful retreat. The Burleson post from this week on the forum is a good example. You might be able to provide some extra comfort to a buyer by being able to convey the minerals. Most folks in Austin/San Antonio aren’t familiar with the idea of mineral interests (or the industry in general), so it might be a bit of education for them also.