Having searched for such an example without much success, I thought I would pose a question to those assembled here.
Among the most common queries I have noticed in my brief time on this and other royalty forums, is an individual trying to determine whether to sell mineral rights or retain them for substantial potential revenue.
Central to that determination would be some ballpark estimation of a value in retaining those rights vs. a known value in selling.
It’s quite possible this has been answered many times and I have simply missed the discussion, but can members here with royalty experience generalize on an estimation of the annual value of one net acre in Tyler or Wetzel county?
Obviously there are myriad of variations and factors that make each situation unique, but for those who just opened a letter offering them a nice sum of money for their 1/4 acre….a few examples of what actual royalty’s on one net acre may offer substantial guidance.
Is it possible to tastefully and privately discuss a few examples?
Wasn’t addressing a legal issue but a financial one.
Many folks search for information to gauge potential value of their royalties against an offer in-hand from someone wishing to purchase those mineral rights from them.
Many wonder if the expense of paying an attorney is justified.
Plenty of information available on lease bonus payments and negotiation, but virtually nothing on estimated revenue if the well is drilled.
That’s why I asked if there are revenue examples for one net acre in one full year of production.
I understand, but my attorney put me in contact with Martin and Associates, they do mineral advising and appraisements. Before we decided to lease, we had a few offers to purchase. We had no clue about all that goes into evaluating our mineral assets. Free call and learn so much.
A simple answer is not readily available. It all depends upon the reservoir that is being drilled, the completion techniques used for a particular well or wells. the choke on the valve used to produce the well(s), price of the commodity projected how far into the future and the discount value for the time value of money, the contract by the transportation company, the operational costs, etc. A dollar today is worth more than a dollar tomorrow (usually)…
I have WV minerals and can tell you that it varies differently with each well and mine have dropped about 1/2 in the last year. As far as I can determine the drop is due to natural gas price decline and companies reducing production.
If you are being offered a lease why not get the best deal you can and see where it will go
I just received a packet…wanting to lease my mineral rights for approx 40acres for a $500 sign on w/17%royalties…is this a good good deal…I have no clue about this…I’m not sure how many others received this packet except for my sister…can anyone pass some advice… please
$500 an acre or $500 for 40 acres? If its the latter and only $12.50 an acre to lease, might as well hold out until they pool/permit a well, if they ever do.
This is certainly the most discussed topic on the forums. With a little scrolling you can read numerous examples here to get a feel for what the going rate is for lease bonus.
You mention 40 acres, but is that gross acres or net acres? That is critical information number one in determining the size bonus to anticipate.
Typically, the producers will pay bonus money on net acres in a parcel. You could very well have 40 gross acres in the parcel, but perhaps your interest in that parcel may only be .25 of an acre (for example).
As a result, a producer could offer $2000 per acre bonus, but your individual payout would be one-quarter, or $500.
Thats one possible example to explain the $500 offer.