My family and I just received a request for mineral rights on some of my deceased family's land in Oklahoma. Where do we find the complete information on fair value, what strings might be attached, and if it's normal to have someone (a Lawyer) make us an offer out of the blue, like this? The paperwork looks official and tempting. Thanks, M.G. Olson
Hi Michael,
A couple of thoughts for you...
You'll find many quality answers throughout this forum which can shed light for you. That said, there is no such thing as "complete information". There is GENERALLY a market value for producing and non producing minerals in counties (and more accurately, areas of counties), and there are hundreds of 'strings' that can be attached. Strings, as in clauses which have real implications in the legal paperwork involved in both selling, or leasing mineral rights. Get informed, just like you're doing. That's the best watchword one can provide you. There are good and bad actors out there, just as in any industry.
Kenny D, site founder
Thanks for your input. There are 9 of us, all in our sixties and this is a new and exciting possibility to help bolster out retirement incomes. I have the letter from a lawyer from Golden Land Services, LLC. If that tosses up any red flags, please let me know. The offer is a 5 yr lease at $500/acre, 3/16 of net profit. There are 9 of us that got the same letter. It is all new to all of us. We have all retired, for the most part, and anything from this action is seen as "found money". The land is in Caddo County and was left to us by our Grandfather. None of us want to blow an opportunity to make some money. I will make some calls to Caddo County, and the GLS LLC to feel them out. We have many question. Thanks again for your reply, M.G. Olson
Mr. Olson,
I see reasons why I would not enter into that lease agreement as offered. Mainly because of the 5 year, but I imagine the full details of the lease would also favor the lessee more that I feel would be fair.
The "found money" may have some strings as you were worried. From the way your two posts read.I would almost expect you are going to have marketable title issues.
Can you supply the legal description? Possibly Section xx-9N-12W I see some interest in sections 16, 23, and 24 there now. As far as I know Caddo County records are still not available online so some info may be limited.
There is also a Caddo County specific group. You might go back and read through the posts there. Link To Caddo County Group
Thanks, again for your feedback. We are talking about Sec. 23, 9N, 12 W.
That explains why I couldn't find much on Caddo County records. Our offer is for 5 yrs, $500/acre, and 3/16 of Net. How is Sec 23 producing, or does anyone even talk about that?
I will go to the link for the Caddo County Group.
Thanks for your interest.
Mike
Is a 5 year contract too long for such an unknown (to us) commodity? Is 3/16 of net too little? l. Who do you call to get answers to our mounting questions? The forum is great, but I'm going to have a conversation at some point.
Mike,
I don't know the activity as well as I should there. We do have some rights within 10 miles in a few directions.
I don't show any recent drilling activity on that township (6x6 miles square). The pooling orders nearby are showing in the $150-300 range so the bonus money offered is not too bad. Since they are wanting to lease for 5 years, there may not be anything showing up on the radar for a while. TODCO properties has quite a few leases in that section. It may be worth contacting them to see is they are interested. They may have been leasing for the same company that Golden is now. You could also contact the lessors who have leased in the past to see what their terms were. I have had some success in fellow mineral owners giving information, more so when there is a connection. If they knew family members etc, you can get all kinds of info.
I usually try to wait for the 2nd or 3rd round of leasing, but there is always a chance interest may drop in the area. The amount of acreage and your financial needs may play a part in the decision. If you have 1 acre, $500 may only be a small bump. If you own 70 acres with $35K at stake, you think about it in a different way. I've been known to lease only a portion of our net acreage!! Also if the relatives all work together with a common goal, you might be surprised with the results. I've also been known to arrange a lease for relatives but I held out until later. I risked interest dropping in the area and they already were holding a check.
The big thing is getting a good lease as the Bonus amount, term, and RI (net) "may" be the least important part of the transaction. This may involve some additional negotiation and research on leases.
Rick
Mike,
I was drafting my response when you posted your last message.
Most leases in Oklahoma are 3 year leases. Many have a 2 year option. I would prefer a 5 year paid up lease over a 3 year with an option. 3/16 is about the norm now. Very few 1/8 leases are filed. I’ve been negotiating for 1/5 or more recently. The area will have a big factor on terms.
Rick
Michael,
Noticing that you mention above that there are 9 of you, (and I'm assuming all 9 are mineral owners), let me state what I'd consider to be an absolute necessity for you. This statement falls into the "First things First" category.
Here it is. Get all nine of you together, and determine if you all will agree to sign your name to a 1 page (or 1 paragraph) agreement that you will all act together as one accord, and elect one party to represent you all in negotiating with any landman that comes your way. This is a business transaction, and there a multitude of problems and issues that will come your way if several different parties begin carrying on dialogue with the leasing agents.