I’m not sure what is going on and don’t even know for sure what I’m asking. I received an unsolicited check for $4034.67 and a mineral and royalty deed for all the minerals in Reagan County. I inherited these minerals and don’t really know anything about what is actually owned. It mentions BOLD WTG 5-234 and WTG 5-234 B, but says all minerals in Reagan County. It mentions Earthstone Oper LLC as the operator.
I get a check of about $100.00 once a quarter. Why would anyone want to spend $4,000. for property that pays $500. a year?
Because they anticipate in the near future more production, $100.00 could become what ever it was in beginning, possibly several hundred per month. *** possibly*,*
Be very cautious about offers like these. You may want to look up this area on the RRC and see if there are pending permits around you or on your land. In my experience first offers are usually low to what some solid negotiation can get. The wording on these sorts of offers can also be very dangerous when you read the fine print. Might be a perfectly legitimate offer, but do your homework.
Typically, when a company/companies proactively reach out it is because they have researched the area, explored current and potential activity and run numbers of valuations today and into the future determining there is an upside. The starting offers provided are inevitably low.
In our experience, a reputable mineral investor or fund will send an introductory letter with a low but reasonable starting point to see if there is interest in discussing a deal. If so, then negotiations are done on terms, valuation etc. Only once everything is agreed to is a deed written and payment made.
However, in recent years, there are many more predatory companies in the industry looking to essentially steal minerals for what are more often than not laughably low offers. They send out checks with deeds such as the packet you received in the hopes of enticing people to deposit without question or out of confusion thereby throwing away their interests for “easy” money (less the sig. taxes owed on the income of course).
My advice is shred the check and deed immediately. Hold onto the minerals and hopefully you’ll see activity and new wells/production in the future. If you need/want to sell, then wait for subsequent offers from legitimate companies (where there’s one, there are usually many more) willing to discuss their valuation with you and then negotiate.
Also, I would advise against a sale of every real property asset in the county. Limit any sales to a specified tract and valuation for that property alone. It may be that you have some additional unknown rights which would make the offer too low.
@bkay - anytime you or anyone else receives an offer with a mineral deed and a “check” along with the offer, then run the other way. Additionally, if any writing contains “ALL Minerals in xxxx County” that is another red flag. They are trying to prey on those that do not understand binding contracts and what they own.
In your case, run.
It appears that the 5-234 B units contain 5 active producing wells and 2 DUCs (drilled, un-completed). The 2 DUCs are on the W2 of Sec. 234 and 5. This mineral buyer is likely after those DUCs to obtain flush production when they get turned online.
Don’t sell under any circumstances. These companies offering to buy are scam artists. They offer you 3 to 5 times your last three or four royalty checks when they already know your checks are $0 to only a few dollars. Oil and gas companies stop or slow production for many reasons. That has nothing to do with what’s in the ground or what your minerals are worth.
If you sell, sell based on what’s left in the ground not what was taken out over the past few months.
I find most of these offers insulting.
They never really tell you they are after not only the producing mineral but everything you own in the ground. Often that means your oil and gas. Coal/ lignite has to be spelled out separately from oil and gas.
Never sell using their cookie cutter deeds and sales contract. It’s written in their favor.
If you just want to be taken advantage of, sell it to me. I’ll swop it for Beachfront property in Arizona.
