I have received mineral rights (along with various siblings) passed down by a parent who died recently. I unfortunately know nothing about this topic. The executor of the estate has gotten an offer to sell these rights. We have all been asked to sign various documents to complete this sale including a confidentiality agreement that prevents us from disclosing the payment amount / net acre price.
I have found discussions on this site related to the reason such clauses exist for leases, but nothing related to sales, though I imagine similar reasons of preserving the buyer’s ability to negotiate with other owners may also hold here. The clause has raised the eyebrows of one notary but I wanted to ask a group of experienced people if this is a typical practice and if there are any significant known risks to signing such an agreement.
I can only say this, My brother was approached with something similar when my mother passed away… His reason to take the first offer was the estate carried it for $1 for each section. It was stupid as it was purchased in 1950. They offered 240K for it. He took it. We all got screwed. it was worth 10 times that. Take time and research before you make a choice on what it is worth… I lost because of HIS choice and stupidity a lot of money. 5 Sections of rights that cannot be recovered. Do yourself a favor and SLOW DOWN. understand what you have and what it is truly worth. Then make a choice to sell or not.
Just some one that has been there and got screwed.
Yes I have other other properties an trying my best to enjoy the checks I receive with no regret.
mk
My family recently sold mineral rights in Wetzel County, WV. Our sales contract also had the non disclosure clause. We used a highly regarded oil and gas attorney. The non disclosure clause is common.
Reading through your question I wanted to mentioned something else for you or the executor to consider.
As a side note, I am the executor of my fathers estate. My siblings and I inherited our minerals from him.
I have learned a lot along the way.
Hoping you are not accepting an offer without knowing the value of your minerals. Our lawyer connected us with a company who valued our minerals for the date we inherited them (our fathers death date), and also valued them if sold in 2022. You will want to know what the value was at the time they were inherited to offset your capital gains tax. This was huge in our case. You will also get knowledge of what the minerals are worth if sold this year. We sold our share in 36 acres split between various parcels. We were charged less than $300 for the Valuation. Best money we spent!
@Lkdec , I agree with that assessment. My sibling had no clue and we got taken to the cleaners. I was against it from the get go with out knowing what was happening and no say in the matter at the time.
MK
Yes I have other other properties an trying my best to enjoy the checks I receive with no regret.
mk