My sister and I have inherited mineral rights located in OK, from my mother. We are very new at this and don't know a lot about it. We have been approached by AOG to sell our net mineral acres (13.5 each). This land is producing and is being leased.
1. Can anyone tell me if AOG is a reputable, honest firm?
2. Should we accept his bid or shop around for a higher bid?
3. We also own the mineral rights on many other acres in this area, some producing and some not, and some not yet drilled.
Should we sell all or some? How do we find out what it;s all worth? It has been fractionalized quite a bit over the years and we are getting up there in years.
Any info, advice or suggestions would be greatly appreciated.
Thank you.
http://www.occeweb.com/og/PubAsst/WebRoyaltyOwnersHandbook3-2015.pdf
Follow this link to get a copy of the Oklahoma Royalty Owners Handbook from the OCC. If you tell me the section, township and range than i can let you know what is happening in this part of the county.
Post your legal location and offset members will give you information.
Prices are going up, in general now is not the best time to sell minerals.
Good luck
The section they want to purchase is Grady 6-6N-5W.
Thank you.
We have a lease on Section 28-T6N-R8W.
Thank you.
Marathon plans to drill a horizontal well across both sections 6 and 7 under the old pooling order. This new well will be operated by Marathon instead of Western Oil & Gas Development. You can read the spacing order 650475 and location exception order 650228 on the OCC website.
Thank you for your information. So would it be wise to sell right now or hold on to them? How do we know which would be the financially wise decision?
Hold on to them. Advocate is just going to purchase them and sell them to someone else for a higher price.
You will get better offers as the price of oil goes up. I have a couple clients who are just waiting for the prices to go up more to sell. Just remember, no one will pay you more than they expect to make off of the minerals in the next five years.
Urrisa,
Only you can determine if you would rather have the use of the cash or the pride of mineral ownership. If you have a certain amount of money in mind that would cause you to sell, find out what your property is worth to the mineral industry through come experience advice. Then decide to sell or hold or a combination of both.
If you hold an action without knowing your base needs, you will only get the best of the worst bids which may or may not meet your goals. Prices offered are never, never fair to the owner. The value to you is the only thing that counts. It is the responsibility of AOG and every other buyer to get as much land as possible as cheaply as possible. An AOG dollar spends just as good as an Exxon/Mobil dollar. Making certain you get the dollar in our account is what matters.
Common wisdom is to hold inherited minerals. If some are producing, the responsible thing to do may be to protect the long term income for your heirs. Today's offers come with multiple strings attached that tie up your property. If you are committed to sell, a little legal expense in understanding the deal is always a good investment.
Gary L Hutchinson
Minerals Managment
Urrisa,
Your situation is similar to ours....as it is for many current mineral owners due to those interests being passed down generation to generation which also explains the fractional ownership amounts. My father always told me never to sell minerals unless you're desperate for cash. We're new to this forum and while very informative little information is shared as to actual values of offers I've discovered..... and I've asked. I probably don't know where to look.
It is really hard to tell someone what their minerals are worth. Prices can change drastically in a matter of months. I had a client sell their mineral interests for $17,500 an acre in Grady County and his cousin tried to sell three months later (same amount of interest, same section/twn/rng) and the best offer we could get was $3,000 an acre.
It all boils down to what dollar amount you would be happy with.
Do you have children that would appreciate owning the minerals? Would it allow you to retire? Get out of debt? Do what is best for YOU!
If I owned your mineral interest, then I would hold on to them. Producing minerals are usually valued using some multiple of the net revenue each month. Typical offers might be around 30 to 60 times the monthly net revenue (check stub amount) but can vary depending upon the stage of depletion (for example, some wells are close to their economic limit and will soon be abandoned despite producing royalties). However, non-producing mineral interests can vary widely. One way to estimate would be to look at a multiple of lease bonuses in your area. Something like 2 to 4 times the bonus amount might be one way to estimate but too many factors can cause the amount to be different. Operators are producing oil and gas from zones considered non-producing only a few years ago.
If you want to sell, then get several offers from royalty and mineral buyers. You can find them on the Internet. If you don't need the money, then hold on to them and enjoy the income.
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Mr Gillette, if you tell me the section, township and range, then i will let you know any information that i have about it.
Dear Mr Gillette,
You can find out the price paid by looking at the mineral deeds recorded at the courthouse. The documentary tax is $1.50 per $1000 on the sales price of minerals. You can research the recent prices paid for minerals in your area by looking at the amount with the label DOC. The amount with the label FEE is just the recording fee. For example, a mineral deed showing FEE: $17 and DOC $157.50 means that $17.00 was paid to record the deed and $157.50 was paid on a sales price of $105,000 for about 155 acres or about $675 per acre. My experience is that it is not always easy to tell from the deed what is the exact number of net mineral acres.
They are low ball, mass mail out guys that are trolling for cheap minerals to sell to someone else. These minerals are in a very good spot. They have the potential to drill anywhere from 10-18 HZ+ wells in the unit your minerals are in. I own some close by and turned down an offer for 21,000/acre and do not regret it.
Thank you for your reply. So if we need the cash now and do not have heirs to leave the rights to, who would you recommend we sell to?
Yes, if the time value of cash is relative then I would suggest selling. If you don't have an immediate need for the cash but could use some, then sell 1/2 of what you own at the best price. These minerals could generate a comfortable monthly income in the future. Nothing that will make you wealthy but mine close by after the well declined and leveled out pay somewhere around 100 bucks per acre, per month pretty consistently. Its a great area to own minerals in. During the first 3-5 months it will be substantially more than that but will fall on its face after the flush production is gone.
I should mention that the 100 bucks a month is off one HZ well. It might be worth mentioning that a couple miles from these minerals the operators have filed an "Increased Density" for as many 10 HZ wells per unit. So you would need to multiple that 100 bucks an acre times each well to see the potential monthly revenue. Makes a big big difference
Thank you for your response. Do you know how soon the potential to drill from 10-18 HZ+ wells will be? Soon or many years?
Thank you for your response. :)