Currently I own minerals and I am looking for ways to get in front of more deals. My guess is online auctions? Looking primarily in Texas, North Dakota, Oklahoma and Arkansas, any guidance is appreciated.
You and everyone else. You could hire a broker to go through the courthouse records and cold call every mineral owner in your target areas, but you would only be the 200th person to contact them in the last two years. I wouldn't recommend this approach unless you could really narrow down your target area.
I'd say your best bet is one of these two outfits. They are probably the most active dealers for smaller interests.
Matt,
Any luck?
Any advice?
Dear Mr. Jensen,
The best way is to know somebody and get on their distribution list when minerals or royalties come up for sale.
Best,
Buddy Cotten
Best advise: keep your eyes and eyes open.
Try West Virginia. Sorry = Im being a star alec.
A causal friend had a standing classified ad in the newspaper. It was simple. " I buy mineral rights" name and phone. Just googled it and found an old copy online. That's wild.
Maybe you could do this on craigslist, small town newspapers in your area or hot areas, etc.
You could also connect with bail bondsmen, attorneys, pawn shop owners, everyone you know.
Too many people on this forum say don't sell your rights, never let them go, etc....but sometimes people need money for bigger or better investments...or at worst to get out of jail. You can help them. Sometimes managing 10 or 100 or 1000 wells is just too much for some people, maybe for many people, no matter how much or how little money they get. I'm sure there are people somewhere getting 100 $5 checks every month and that's just to much to track.
I'd also have business cards printed with the same slogan. I buy mineral rights....your name and phone and maybe a website. Leave those with all the courthouse square attorneys and abstractors.
I can't tell you how many of those offices I go in and ask if they know any landmen that work that county and they don't have a clue. You would think some of the abstractors would have a card or a name and phone, but don't.
Go by more than once. Drop your card every time. Bring them a donut, or a cookie, or a candy bar every time, so they remember you. Leave 10 cards or 20 cards with them. They might throw out 1, but not 20.
Online there is O&G Clearinghouse that has auctions and negotiated sales. They're not all $mil sales. Some are relatively small.
Have you had luck with any other tactics?
First, be sure you have enough money. Direct ownership of mineral interests requires work and continued diligence to maximize your returns. If you have less than $100,000 or so to invest, you probably don't want to buy minerals directly, and you would be better of buying stock in Black Stone Minerals.
Unless you are willing to make contacting land owners your full time job, your best bet is to go through mineral broker if you choose to buy minerals directly. Generally a broker will do all the leg work and deliver you a mineral deed with a title report for your money. The key is to find a broker who is reputable, with sound business practices, who you can work with on multiple transactions. You should tell him what and where you are looking to buy, what your budget is, what period of time you want to invest it, and how spread out/concentrated you want your investment to be. He will tell you whether he can help you or not and give you an idea of what you would pay for what you're looking for.
Just be aware that the broker does not work for you and is not your agent. He makes his business by buying directly from landowners and selling to an end buyer for a profit. He wants to get the highest price he can from you, although if he expects to have ongoing business with a buyer he has an incentive to give you a reasonable return on your money.
You can also buy directly through an online auction, but in my experience you will pay higher prices at auction than any other way of buying minerals.
In Texas producing minerals are sold at tax auctions when the mineral owner does not keep current. There were some small mineral interests sold in Harrison County on the first Tuesday of August. We have never bid on any. I believe the owner has the right to redeem the payment and reclaim the minerals and some other factors. I am sure in some areas there is a lot of competition. As far as I know, every county in Texas has random tax sales. Just a thought. Kathy
Also check out EnergyNet.com. IMO, it is the most active auction site. Agree with most other replies that you will have to be diligent and bid smartly in order to get a good deal and not get caught up in auction fever. The other assumption is that you are an accredited investor (>$1MM net worth, multiple six figure annual income, etc.), otherwise you won't be let in the door. Also, do some due diligence around reputable mineral brokers in your area and contact them to setup a meeting to discuss what you are looking for (type of property, target price range, etc.). Finally, the underlying assumption is that you know what you are doing. In order to invest smartly in minerals, you need some basic petroleum engineering knowledge or have a petroleum engineer that you could partner with to perform valuations on deals to ensure you know what each property is worth. If any of this doesn't sound like your cup of tea then I would agree with the poster who recommended investing in a fund that owns a diversified portfolio of minerals.
Hope this helps,
Matt Sands
Minerals Management