I may have to either purchase my mother's mineral rights in 1, 145n, 104w or sell them as she is in a nursing home and will need to exhaust her assets before medicaide kicks in to help. I have no idea what a fair market value per acre would be. Any thoughts on how i could obtain an estimate of value?
Sorry wrong legal description. It should be 3, 146n, 99w.
Gary, it's a tricky subject with many factors. Are the minerals leased? Are there wells producing now?
There is a lease in place. No production and from what I can find nothing in the works
Is that Section 1? If yes, it looks like there is a well on it. Go to: https://www.dmr.nd.gov/oilgas/findwellsvw.asp
Here's the results:
| 19217 | 3305303190 | Confidential | SENE 1-145-104 | WESCO OPERATING, INC. | FEDERAL 42-1 | BICENTENNIAL |
If there is a producing well, then the valuation will be a simple formula like any annuity would be. There are a lot of companies and individuals that would want to invest in a producing well.
Thanks Daniel, I was looking at nearby properties with wells and supplied that legal instead of Mom's. Hers is 3, 146n, 99W. No wells on that. I have seen reference to a formula that says 3 to 5 times the last last lease for a purchase price. is that something i could use as a ballpark number?
Daniel Dayton said:
Is that Section 1? If yes, it looks like there is a well on it. Go to: https://www.dmr.nd.gov/oilgas/findwellsvw.asp
Here's the results:
19217 3305303190 Confidential SENE 1-145-104 WESCO OPERATING, INC. FEDERAL 42-1 BICENTENNIAL If there is a producing well, then the valuation will be a simple formula like any annuity would be. There are a lot of companies and individuals that would want to invest in a producing well.
Totally depends on a number of factors: Area, leased or not, terms of currant lease, how are wells producing around it, odds of getting a well, etc.
The numbers I've dealt with are 1.5 to 3.0 times the current lease value if it were NOT leased. i.e. if you could lease it and it would bring $1,000/Net Mineral Acre, then to sell it you are looking at $1,500 to $3,000 per NMA to sell it. And that is if it's not currently leased.
If its currently leased, then those numbers change based on the terms of the currant lease....how much is the royalty...how long till it expires...what are the odd of a well........all effect the sales price.
Like everything in real estate the value of mineral interests is all about location.
Thank you Daniel. I would rather not have to sell outside the family so i guess i will discuss with my accountant and see if i can figure out a fair price to purchase from Mom. Things are never easy i guess. ha.
Thank you for your input, i definately appreciate it.