This group has been extremely helpful to me, so I wanted to pass along some new information.
Today in the mail I received an unsolicited offer for my mineral interest in the referenced legal S35-13n-19w of $7,200/acre from Morning Star Energy in Dallas. My previous best offer about 6 months ago was $3,700. About 2 months ago I got a phone call offer of $2,500, which I laughed at.
If you have a legit offer for 7200/ac in that section and don’t take it then it will haunt you for the rest of your days lol.
I’ll take my chances -
Almost all of that township has OCC cases within the last 24 months. Permits for multi-unit horizontals in 5/8, 6/7, 30/31 already filed. Given that Foss Lake sites on top of 35, the most likely horizontals would be 26/35 with a surface location in 26 or just over the border in 23. I see 13 OCC multi-unit horizontal cases.
Just curious as to why you wouldn’t entertain the offer of $7,200 an acre to sell half interest? The math on that works in your favor big time, especially given the location of your minerals.
Mostly due to taxes. I’ll give the IRS and Oklahoma income tax roughly one-third or more, plus it would jack up the cost of my Medicare premiums. At my stage of life, I want the monthly income.
I’m 78. I don’t know how many acres you own, but if it’s more than 10, it would be worth talking to a CPA about given the high offer. You could sell half at capital gains tax rate, take the proceeds and invest it, and keep the other half for monthly income if they drill a well on your minerals. Just a thought.
Long term capital gains are taxed at 15%-20% (if you make over 533k/yr), likely less than what your income tax rate is already
Take the money and put it in an appreciating asset or something that compounds where you can take draws like a Vanguard fund etc
Royalties also have a nice 15% fed depletion rate and OK adds another 7% so 22% off your taxes on the royalty income.
I got a letter from Morning Star Energy this week and was curious how has your experience with them been so far? I can’t find too much info on them but am considering doing business with them. Any thoughts would be appreciated. Charlie Noble
I haven’t talked to them because I’m not interested in selling. It’s hard to tell about these companies because many times they represent someone else.
Thanks
The sale may be eligible for exclusion from OK tax. https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/individuals/current/561.pdf
Oklahoma taxes don’t concern me. It’s the fed and Medicare that concerns me.
Fair enough. Just wanted to throw it out there!
thank you