Unsolicited Offer - Midland County, Block 37 T2S

Unsolicited Offer - We need some sound advice.

Track 1 - 4.375 Net Acres West 70 Acres of East 150 acres of the NE/4 of Block 37 T2S, surface to 9400’ Track 2 - 5 net acres West 70 Acres of East 150 acres of the NE/4 of Block 37 T2S, 200’ below to 9400’

Offer 19,800

What should we do?

Welcome to the Forum.

Any time you get an unsolicited offer, the buyer knows something you don’t know and has every intention of making a profit. Personally, our family does not sell (at this time), but uses the offer to figure out what is going on in the area and get more informed. Is there pending drilling; are there back royalties that need to be claimed, etc. Does selling fit in with your family’s financial plan? You may have to pay capital gains tax, so consider that as taking away from the total offer. If someone randomly drove up and offered to buy your car, wouldn’t you sit back and wonder why?

Given the current economic situation, all offers may be on hold for a while.

I suggest that you go to the Midland County Category and read up on what is going on. Look through the recent postings on the Permian Basin. Learn which websites are available for finding information. They are posted in various places on the forum.

I’ve generally given this advice as well, but recently my family chose to sell 3/4ths of our interest in a section in Reagan County that did not seem likely to be developed soon. We used a 1031 exchange to defer the taxes and buy into a Delaware Statutory Trust. Its also possible to buy rental property with an income stream to replace the royalty stream. Given the volatility of oil, especially now, diversification of assets has become a more popular option.

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