Good morning, quite unexpectedly my husband and I received a letter from Novus Land Services LLC (Mockingbird Resources LLC) wanting to either purchase or lease mineral rights on our property in midland. Along with the letter of interest were several contacts, a mineral deed (if we wished to sell), an oil, gas, and mineral lease, and a memorandum of oil and gas lease. It all sounds very enticing but also too good to be true. I know it’s not necessarily common to own the mineral rights to your property, but I’m having a hard time figuring out the path to take to find out if we do potentially own the rights. I cannot physically go search the deeds because I no longer live in midland. I read over our original purchase contact but didn’t see anything blatantly obvious to convince me that we did or did not own the rights. I also don’t want to spend a lot of money hiring a lawyer or landman if this is a wild goose chase. So here are my questions… When companies send these type of letters do they already know I own the mineral rights or are they more or less fishing to find mineral rights owners (basically do they do the research and leg work or do they rely on the intrigue owner to spend their time and money figuring out if they own the rights). Secondly, if I did go in search of the mineral rights could anyone advise on the first few steps I should take. Lastly, if this isn’t a scam(or fishing) and if we do own the rights and if this potential lease were to actually happen and if royalties were actually paid out (a lot of “ifs” I know) is 20% a standard payout? Thank you for any insight provided.
i would suspect that they think you own the minerals but I also suspect the deed and the lease have you warranting title.
Also, i get offers almost daily. they are almost always low ball offers. As I have been told, it is a game of numbers. I would be slow to do anything. If it is real, they don’t go away, just keep increasing their offers.
Good Luck
We were contacted a couple of weeks ago by a landman whose client was “one of the major oil producers in the world” (an article in The Houston Chronicle yesterday makes me suspicious it is Royal Dutch Shell).
I had just received my March courthousedirect report for mostly Jan OGLs. I found 10 new leases in the report - 8 for 25% royalty, 1 for 23% royalty and 1 for 22.5% royalty. He offered 20%. I refused to accept it, quoting my knowledge of the common royalty offers in Dawson Co.
I agree with the other poster. I think they know from title searches who owns the mineral rights and what percentage they own.
My advice - do some research to determine the most common royalty and option offers. This can be done either using the information Clint Liles posts on this site or through courthousedurect. Ask for advice on this site (I do). There are so many experienced people on this site willing to share their knowledge and experience. Then, sit tight until you get an good offer.
I hope this is helpful. Peggy
What is the legal description of the property in question?
Lot 13, Block 16 of the north gate addition section 4 of the city of midland
I definitely own my mineral rights (kept them after I sold my house) and received the exact same package from Mockingbird Resources. My rights are also in the northgate addition (which is what brought me to this thread!) They are offering me $1000 to purchase my rights or $500 to lease with 20% royalties. It’s only 0.224 acres, though I have no experience so I don’t know if it’s a good deal or not. I asked a partner of mine about it, a veteran landman and owner of an actual landman training school, and he told me it WAS NOT a good deal. He said that he saw an acre go for $20,000 in Midland County.
Yeah Jim that is a really bad offer on a per acre basis for Midland County.
Cautionary tale. My mother-in-law lives near Old Midland, she was offered $5000/acre to purchase her mineral rights. This was a year ago. It was just over a 1/4 of an acre. If she owned 40 acres outside of town she should be leasing for something like 15k an acre and then be able to sell her royalty for another >25k an acre depending on permits. I told her to tell them to get bent.
She has not, to my knowledge, received another offer. She is not exactly young. As far as she is concerned I cost her $1600. Ooops. And she may be right. You definitely are not going to get rural Midland County pricing for a residential lot inside of Midland. But it should still be a lot better than these sort of numbers, especially if you are selling it all. I can see where bonuses are quite low as it may be tough to get enough leasing together to get a drillable unit before terms start expiring, but it’s highly likely that wells will eventually get drilled, and the royalty value on a per-acre basis will be quite high when that happens. You don’t want to give that away.
So I would say lease or don’t lease at whatever bonus. But definitely 25% royalty. I don’t think you need to do any research there, 25% royalty is standard. And don’t sell unless prices get a lot higher. Your mileage may vary.
Thank you. I submitted a counter offer to lease for a $1000 bonus and 25% royalty. Perhaps a bit of a risk but I’m willing to take it, as I’m certain the initial offer was low-balled to some degree.
Thanks again.
Jim, the same company that contacted you is who sent us a letter too. We confirmed that we own the mineral rights so this is all a legitimate offer. We aren’t planning on taking the first offer. I’d be curious to know how you submitted a counteroffer and ultimately what the companies reply is. That is if you are comfortable sharing such information with me.
I emailed the contact at the address provided in the letter. I do intend to share any response that comes of it.
Response: “…we will need to hold firm as of right now on the royalty but I will check on the bonus amount. If it were a much larger interest it would help but a portion of the acreage is already reserved. Concerning the $1,000.00, I know for sure they will pay that amount if you would like to sell. I will check back in on the lease bonus amount and let you know. Approximately 75% is your portion of mineral interest I believe, in the lot acreage but don’t quote me on that. Thanks and I hope we can come to some sort of agreement.”