I own 1/14 of 160 acres in Ellis County, SW/4 of Section 2-16N-24W. I was approached last year to lease my mineral acres, and a quiet title was done by the company and just signed and filed on July 18 2023 so everything is clear.
I was originally told by the landman and attorney handling the quiet title that I owned 22.8571 net mineral acres, and am now being told I own 11.4285 net mineral acres based off the quiet title by the company I lease the mineral acres to. I am still very new to this so trying to understand the math. If you take 160 x .14 that gets you the 22.8571 but if you divide 160 x 14 you get 11.4285. Which is correct for determining the amount of mineral acres I own?
I am currently leasing the acres to the company who executed the quiet title, and have had offers from them and others to buy the mineral acres. Some companies who have offered to buy say I own 22.8571 so trying to clarify!
Also, the top offer to buy is $3,200 per net mineral acre so wondering if that is a fair price?
1/14 of 160 acres is 11.4285 net mineral acres. If any buyers are saying you own twice that (22.857) then they might be referring to “net royalty acres” (or NRA), which a net royalty acre is one net mineral acre lease at 12.5%. How the math works is if you have 1 net mineral acre leased at 25% it’s equal to 2 net royalty acres. So 11.4285 net mineral acres leased at 25% = 22.857 net royalty acres.
Buyers often talk in net royalty acres because it’s way of standardizing the units of $/ac between sellers. Minerals are worth more with a higher lease and less with a lower lease.
Which then leaves the question of if the offer is in $/nma or $/nra.
But whether the value is good or not depends on the exact acreage and your personal financial risk tolerance (since this is ultimately your decision). Most offers I see extended to buyers who haven’t gone through a bunch of effort to get the offer are only 25-50% of what I’d consider fair. Sometimes much worse, even.
There is an expanding play in Roger Mills and Ellis county for the Cherokee reservoir. Lots of buyers trying to snap up acreage. Most of my offers have been low based upon the engineering work that we had done in the area.