I inherited 5 net mineral acres in Garvin, Co. and have a lease with a 1/5 royalty interest. The leasing company sent me a letter saying they are getting ready to drill. I have an offer from another company to buy the mineral rights for $2500 an acre. I have absolutely no idea if this is a fair offer. Anyone??? Thanks so much! Cheryl
For the amount offered to purchase, my best advice is to not sell at this time. Ten times that amount, I would take a serious look at the offer, but still might not bite.
There are quite a few lowball offers out there. You not only have the possibility of your current well, but perhaps future ones. That is what they want and they hope you do not get informed. So congrats to you for asking good questions. In my experience on my tracts, all of my offers have been quite a bit below what the minerals are actually worth.
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Mrs. Cheryl,
Good morning. Where is your interest located in Garvin: Section/Township/Range? Several factors will have an effect on price evaluation: interest location, the operator of the well is as not all operators are of the same quality just as all doctors or all lawyers are not of the same quality, etc.
“etc.,” = landmen, mineral buyers, mineral sellers, geologists, engineers…
Thank you all so much for the information. I told the buyer that I just don’t know enough right now to make an informed decision. Need to do my homework!
Interest location is: W/2 SE/4 Section 9-1N-2W. Triad Energy is “proposing the drilling of a 20,600 foot horizontal well to test the Woodford formation at a legal location in the referenced section. Triad will be the proposed operator of the Unknown #1-10-9XH.” They said the well will have a vertical depth of 10,300 feet.
Sooooo…I don’t really understand any of this; but, it seems prudent to wait and see what happens with the drilling. Right? I also don’t understand what it means to have a royalty interest.
Please don’t boot me out for being so ignorant. These mineral rights are an inheritance passed down (and divided up over and over) through 4 generations.
Welcome. All of us started at ground zero knowledge. Yes, the best thing is to usually keep your minerals if they are going to drill a horizontal well and you may have the possibility of more some day. That is what the buyers want. If you want to learn more, read the Mineral Help tab above. Read through the Forum on Garvin, Grady, and Stephens to get familiar with the questions that folks ask. From my experience, every offer to buy that I have received has been below what the minerals were worth.
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Keep your royalties. You should make more money in the long term. And get an attorney to look over any and all paperwork they want you to sign. Dont agree to pay production costs. Negotiate the interest rate.
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M. Barnes, your advice has always been spot on… The forum is fortunate to have you on board. I’ve been watching Williams County, ND for awhile. I visited there last month and walked around my land. Really cool to see where my great grandparents homesteaded. I saw a number of ‘pumpers’ on my drive from Minot to Grenora! My property had two geological studies and got permitted just before the last bust. We shall see what’s going to happen in those parts. Deborah
What is the best way to evaluate the value of Mineral rights in Garvin County. We inherited a lease with 1/8 royalty interest on 12.33 acres on section 26-4N-4W and have been approached by a buyer unsolicited by us. We have 3 different contracts on this property but have little understanding as to the true value and would appreciate some guidance. Thank You Howard Weiner
Interesting area. There is shallow production from earlier drilling and there is a horizontal well called the Wertz Trust which was drilled in 2017 in the deeper shales. Anyone making an offer knows the potential for more horizontals that could be lined up parallel to the Wertz trust and they hope that you don’t know that.
Any time I have had an unsolicited offer, I step back and consider how much they know that I do not know, how much will they make off the deal that I won’t and what is my time frame. Since we do not usually sell our minerals, I have watched the deals and future development after I ignore them. I have made more money by holding on. I suspect there will be future drilling in this section, so I would hang on (I do have acreage in this section).
You can have a registered petroleum engineer give you a value of all the current wells in the section and then they can give you a predicted value if more wells were drilled based upon their knowledge of the area.