My family and I are signed with EOG and have been for 3 1/2 years. For the past 6-8 months, we are getting letters-almost daily - from some company - can't remember the name - wanting to make us an offer on buying our rights - "Get your money now" kinda thing. Anyone else getting these, and has anyone checked on what their actual offer really is? I'm looking at the big picture, and I'm thinking - no way will we sell. But...if it was a gazillion dollar offer......:) Thanks!
Robyn,
It is very common for royalty owners to receive these letters - I average 1-2 a week for my small interest in Karnes County.
As in any consideration for purchase, there will be low ball offers first and back and forth negotiations if one wants to follow that route.
And you are correct - everyone has their own situation as to selling or not selling minerals. Good example is older individuals who want cash now to do some things while it is still possible.
A point to consider in any royalty situation - how many additional wells can be drilled that include your royalty acreage? Oftentimes a single well has been drilled on a unit (e.g. 320 acres) and there is room for another 6-7 wells (EOG is on 40 acre spacing in some areas). This is the situation that royalty buyers are looking for in many cases - blocks where they can purchase minerals that still have a lot of potential wells that can still be drilled (and therefore get flush production / cash flow).
Never sell your mineral rights, but consider a lease on your minerals. If your minerals was of interest to someone else, they probably will be more of an interest to you in the future.
I've gotten several of these on my mineral rights in LaSalle county. Since I have several hundred acres it would be crazy to sell. I was rather offended by the company's tactics to get me to sell. Like the "difficulty" to pass these rights to our heirs, I inherited mine easily, the taxes owed etc. I look at it this way. They wouldn't want to buy it if it was worth a lot less the what they offered. Hang on to them. I signed with EOG too.
We also have some mineral rights in LaSalle County. Our operator has drilled 4 wells with production 200-300 bbd per well. We did not sign a lease we instead went the co-tenant route.
Something has changed. Not for sure of course but probably so. Find out what has changed before doing anything. I too agree do not sell minerals.... UNLESS YOU HAVE VALID REASON FOR DOING SO. I have bought lots of minerals over the last 30 years, but never without finding that valid reason.
I also have land in LaSalle and we are leased with EOG. The pooling acres we are in has been drilled and waiting for fracing. I get letters every week and have talked to one company about them wanting to buy our mineral rights. I don't think the offer was that great. My family won't sell anyway. We will hold on hoping we get some royalty money soon. I think only one well has been drilled, but maybe since our pool has 632 acres. they could maybe drill again somewhere in those 632 acres.
If you go back thru historical EOG presentations on the EF play, their western EF trend (which includes LaSalle County) is being targeted on being developed on 60 acre spacing - or 10 wells on your 600+ acre unit. Even if they can only drill 7-8 wells on this unit, that is a major royalty cash flow over time - which is what the royalty buyers are looking at as to their long term investments.
An example of EOG's LaSalle development in the EF section is the Hoff Ranch complex (see attachment) which has produced over 1.4 million BO thru May 2014. EOG's wells are the green dots. Note the scale and well density for the EOG wells plus the surrounding "lateral / stick" permits of other EF operators.
I don't know where your acreage is in the county and the section under your block may not be a good as this Hoff ranch area, but this is a good example of how EOG can go after the EF if they like what they have.
Sandra Jordan said:
1828-HoffRanch.pdf (887 KB)I also have land in LaSalle and we are leased with EOG. The pooling acres we are in has been drilled and waiting for fracing. I get letters every week and have talked to one company about them wanting to buy our mineral rights. I don't think the offer was that great. My family won't sell anyway. We will hold on hoping we get some royalty money soon. I think only one well has been drilled, but maybe since our pool has 632 acres. they could maybe drill again somewhere in those 632 acres.