Hello all,
A Royalty Buyer just contacted me with offer to buy an unknown mineral rights inheritance. At first I took it to be either bogus or just mistaken. However further contact appears to confirm the family connections. A quick search brought me here.
The specifics are:
Section 21, Block 56, PSL, Reeves County TX
w/2 of section 28, Block 56, PSL Reeves County TX
NRA: 0.25 Net Royalty Acres
Price per NRA: $2,000
Total Purchase Offer: $500
How should I evaluate this offer? I don’t really need to sell, but want to get smarter, and need a starting point.
Thanks
Hi Barney556180, welcome to the forum. The first rule for mineral rights owners is, “know what you own”. A good place to find out in Texas is the RRC map:
https://gis.rrc.texas.gov/gisviewer/
A look at the areas you mentioned indicates four existing gas wells and a number of newly permitted wells.
Keep asking questions until you feel you have a good understanding of what you have.
Do you own the surface and mineral rights or just the minerals? I would start by determing if there is a lease on the property and oil / natural gas wells. Have you used the Texas railroad commission website gisviewer. Also the property appraiser website might show you if there are producing minerals that are currently being taxed. You could also see if your name is listed as owning property but your name might not be there as they are backlogged.
Okay, I found the two properties cited in the RRC GIS. However, I’m stumped as to finding any lease status and just what I presumably own.
Other than the section/block numbers, all I can determine is the Abstract # 3892038 PSL; Label A-2038, and Alternative Name Davis, JB. Not sure what these mean, or how to research them.
As mentioned, the first I’ve heard about it was when Permico Royalties provided the above description and offer to purchase my non-participating royalty interest. Per Permico, this was inherited down from my great grandfather back in the 1940’s. My father would have inherited 1/12 of the estate; I have one brother.
Do you have a link to the property appraiser website mentioned? Where are mineral royalty interests recorded?
I don’t think it’s worth spending money getting 0.25 nma appraised. You should hold on to the minerals. Hire a landman to get the title work lined up that the operator will require. There will have to subsequent documents executed to transfer the minerals to you. It greatly helps to have the documents showing the chain of title of whom your interests derive from when you contact the operator and get in payment status.
Like @PeteR said “it’s important to know what you have”. The records are filed at the county courthouse.
Contract landmen run $400-500 a day + mileage and copies.
Barney you may find this link helpful:
https://reeves.tx.publicsearch.us/
This will help if you want to do your own search of the county records.
Also, be sure to check the unclaimed funds for Texas, since there are producing wells in your area, there may be royalties that were sent to your ancestors.
Be aware that many times these are offers made to the unwary. I have recently been sent a letter offering me $1000 total for a property bringing me $14,000 month.’
Also be aware that there is a difference between a net mineral acre and a net royalty acre. I was recently tempted by an offer that appeared to be for nearly $600,000 for some mineral interest, but realized it was actually an offer for about $24,000 when I realized they were making a per acre offer at net mineral acre.
Barney, if you will look at the two Drilling Permits I attached, the map for the Wapiti B Unit No 753H shows dashed lines for the different Wells planned for the B Unit. The map for the Wapiti A Unit No 752H, however, shows 4 solid lines for the laterals, indicating to me that at least 4 of the Wells have already been drilled. In short, it appears to me that the company offering to buy you and your family members out may be using royalties (money) you are already owed to buy you out. I advise you do not sell, at least not at this time and for the offer you have received.
It looks like EOG Resources is drilling wells and one of the lateral was permitted March 3, 2022. You can click on all the others for more info. Good luck and welcome!!!
Since it looks like PeteR determined there is a lease, and permitted wells on the TRC website you can also determine who owns the lease. You can click on the well and see who currently owns the lease. I would then suggest contacting them and asking what information they need from you to be added to their records as one of the owners of the minerals. Specifically contact owner relations of the company, so you can be paid royalties if the wells are producing.
Thank you Charles…really helpful. One point I’d like to check: The two permits are for Section 16, Block 56. My location is Section 21, Block 56. Am I off here?
Appreciate your knowledge of this. I’d no idea such even existed. Learning little by little.
If I am interpreting the info correctly, the permits Charles provided in Section 16 apply to my Section 21 due to the horizontal drilling. Is this correct that these permits then cover other sections?
Also, as Diesel mentioned, my 1/4 NRA may very well be too little to deal with. In that case, where do those earnings go?
For DCole, how did you get that W1 search result in the RRC? I can’t find it…
Thanks all.
As Diesel suggested, I got the original Reeves County deeds selling mineral rights to my great grandfather in August 1935.
5/640 of 1/8 interest
1/320 of 1/8 interest
I have no feel for what that represents through several generations down to my net .25 Net Royal Acres. How do I evaluate how far to go with this.
@Barney556180 its important to know where your interest is in the section. Could be somewhere on the west half of the section and you’d have an interest in the producing wells, maybe it’s an interest in the east half and you’d only have in interest in the permitted wells. Maybe you’re interest covers the ENTIRE section, Again, it’s important to know what you own.
@DCole his interest is probably unleased, no HBP production (unless it’s some massive unit), and his father was deceased before leasing of this unit started.
