I have received an “offer” from Texas Resources Group for a tract of land in which I hold fractional ownership. I did some limited googling which actually lead me here, and a previous post revealed that these types of rights and deed purchasers send out these offers en mass to people they find in county records documents.
I have no idea if this offer is low, fair, or high, so I do think I would like to do my due diligence and find out what my percentage of the ownership is truly worth.
If I were interested in selling my share of ownership, while trying to maximize my profit, how would one start that process? Are there companies out there who appraise ownership stakes at no cost and then offer to purchase?
I appreciate any insight or knowledge you all have to offer! Thanks!
If you want an appraisal, you will have to pay for it. The closest you would get “for free” is the tax appraisal from the TX county if you are in TX. That would only be for producing minerals. Future value, not so much.
Mineral purchasing companies plan to make a profit on the their buying, so take that into account. They are quite sophisticated in their knowledge of the geology and reservoirs, likelihood of drilling, quality of operators and have a multiplicity of data at their fingertips to figure out the potential value of the acreage.
Suggest that you continue to do more research on the area involved-current drilling, potential drilling, operators in the area, etc. If you post the description on the forum in the correct county, sometimes local folks on the forum will respond.
A willing and informed seller under no compulsion to sell and a willing and informed buyer under no compulsion to buy coming to an agreement on price is considered “fair”-not necessarily the same as “fair market value”.
Also, take into account that if you sell, you may have to pay capital gains tax on the profit so you need to know the fair market value of the minerals as of the day you received them by purchase or inheritance. The difference in the sale price vs the origin price is your profit. The IRS takes those numbers very seriously so guestimates are not a good idea.
The offer is to purchase mineral and royalty interests on 82 acres of land in San Augustine County, TX situated in the M.C. Flournoy Survey, A-584. We originally signed an Oil, Gas, and Mineral Lease with WSH Land back in 2015 with an initial upfront bonus of nearly $15,000. My current NRI on this is .000236
As of today there is an active well (Well 1H) and I am currently receiving bi-monthly checks from BPX in the amount of ~$50/month.
TRG sent me a letter with the offer in the amount of around $3,600. Again, I’m unsure of what the actual value of the Mineral Rights may be on this, but I would like to know because I am interested in liquidating. I cannot have children and will not be passing anything down the generation line. What would be the best way to go about getting offers on these rights?
I have done some digging on Prichard and Abbot, Mineral Insight, and looked at EnergyNet but this process appears to be rather convoluted and I’m unsure of how to move forward.
My brother and I both have the same NRI on this land. Would it benefit us to sell together rather than separate?
There may be mineral companies out there that would appraise your minerals “for free” and then make an offer. If you go that route, you had best contact several different companies to see what others are evaluating the same minerals for. They have a vested interest at heart and it may not be yours. I prefer to use an independent appraiser.
I agree with @M_Barnes. An independent appraisal will give you current market value and also let you know what the future potential reserves of the property might be. But they are an investment and can run between 3k-7k depending on the appraiser and the landwork involved.
Very welcome to see this information. My family has recently been contacted about this general area, San Augustine Co, Tx, regarding a small holding my great-great grandfather bought in 1904. I have some knowledge about mineral rights (coal) here in Kentucky and am generally skeptical about any profits my mother and Aunt would receive for their very tiny share. I’ve thought we would do better to just sell the interest they have outright and be done with it. We didn’t even know anything about it 3 weeks ago, so she probably won’t miss it. They only own a fraction of 10 acres so we’re talking very little money. Our offer is coming from Aethon Energy.
Before you sell, consider checking the TX Railroad Commission site to see it there is a horizontal drilling in the area. Offers to buy do not usually arise without a reason.
Be careful with Texas Resources Group. They may state on the legal description that they’re only buying your interest in A-584, but they put language in their agreements and check drafts that says you are selling everything you own in the county. So you may own additional interests you don’t know about and they would get those for free.