Hello. I have received a couple of offers to sell my mineral rights in De Soto Parish, Louisiana. Has anyone been approached with offers lately? Im wondering what the “going rate” per acre is and if things are picking up. I was offered four times as much last month as I was in April. Just wondering if it’s a good time to sell or if I should hold off for a while.
Usually if they’re offering more then they did in the past they’re expecting production and prices to increase in the near future. Usually I’d say hold on to them unless you really need the funds.
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Offers are constantly going out in Desoto. The going rate depends on a lot of factors and even in the same parish it’s hard to get an apples to apples comparison. The last mineral deal I worked on was in the spring and I believe it was $7k a net royalty acre. I don’t know if that’s a good deal or not, I mostly work for the operators and not mineral buyers.
I would suspect that if you are getting higher offers it’s because permits for a new well have been filed, either including your section, or very close to your section.
The thing I always try to stress to mineral owners that are looking to sell minerals or royalties is to make sure a local (in this case it would be Shreveport) oil and gas attorney looks at the deed prior to you signing - not a real estate attorney, it needs to be someone who specializes in oil and gas. Not all mineral buyers are ethical in their dealings. You can also shop around and call other people and see what they would offer before selling to make sure you are getting the highest possible price.
I would also research who is trying to buy, there’s a lof of flipping going on - and in those cases you are not going to get the highest price. You want to deal with one of the larger mineral buyers who are going to actually keep the minerals in their porfolio - not a small one guy shop that is going to flip them for a higher price to someone else.
You also don’t have to sell all of them, you can just sell the royalty or a portion of it; you could sell into a specific well or lease or formation, or for a set term, say five years, as long as it’s not longer than 10 years. With some of those options you would need a larger tract for anyone to be interested but the point is that there are many ways to carve up minerals, you do not have to sell a straight 100% and be out of the game forever.
Don’t forget to factor in possibilities of capital gains taxes you will incur as a result of the the sale.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
Thank you, I did think of that!
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