We own a share of minerals in Weld Co., Colorado (location below). We share the rights with extended family all of whom have already sold, or who are about to sell. We have received an offer that would be a good amount of money for our family, but we aren’t sure if it is wise to sell. Our concerns are that we might get passed over if we don’t sell now. Current offer is for 7000 per acre (with some variation on different portions of acreage). We are 60yo and will need this money for retirement, but don’t need it quite yet. Would there be good reasons to lease and not sell?
What would you do?
Township 7 North, Range 61 West Township 7 North, Range 62 West Township 8 North, Range 62 West
Tract #1: Section 5: SW/4 Tract #3: Section 1: N/2 Tract #5: Section 26: S/2
Tract #2: Section 6: NW/4 Tract #4: Section 2: N/2
in the County of Weld , State of Colorado, containing 1280.000 gross
The person who contacted you may only be interested in buying, not leasing.
To sell or not to sell is a hotly debated topic on this site. In my personal opinion, its a personal unique to you life decision. Others may suggest you keep it. But you don’t know that you will recover enough in royalties in the future.
Others will suggest you sell at the highest price you can secure if it is needed to pay off a house, put toward retirement, etc. Everybody’s position in life is different.
I would investigate the activity nearby and see if exploration is moving your way. If I really wanted to sell, then I would get several offers and take the best one. Or I would investigate what an auction site would list it for (they do charge a fee).
If I understand you correctly, the property is not leased, but you have an offer for 7K an acre for the minerals, do you know if the offer is based off a 3/16ths OGL royalty and contingent on you not leasing to another company? Do you know how many net acres you own and if there is any activity on your acreage? You are in a unique situation if in fact your minerals are open to lease. Depending on your answers from the questions above, If it were me, Id lease to my LLC at 1/4 and then assign them the OGL at 3/16ths on top of selling the minerals, so at the end of the day you get the mineral sale and get to keep a 6.25% ORRI
There may be another tract or two, but the map shows where you are. Section 5 appears to have been pooled in July. The other sections are being leased up. Offer sounds fair enough, but for unleased minerals it’s sort of mehh; going rates for leases are prob at least 1/3rd of that for 20+% royalty.
