$15000 offer from Black Marble Energy to Purchase Net Royalty acres on my Mineral interests at the subject parcel. I post for general information since I have no interest in selling but I would like to know the difference between mineral interest and net royalty interest. I have my 5 A leased at 1/4 royalty.
They are offering to buy your mineral interest, which since you are leased and presumably HBP for an extended time is buying your royalty interest.
Since they want to buy your portion of the revenue the value of your acres is linearly proportional to your royalty rate.
A net royalty acre is just a way of saying an acre that generates 1/8 royalty. Since your 5 acres are leased at 1/4 you have the revenue equivalent of 10 acres at 1/8 interest.
5 mineral acres. 10 net revenue acres.
Keep your “Powder Dry” Mr. Smith,
"Wonderest" things happen to the "Patient"!
Steve
Did you say the offer was $15,000 total or $15,000/NRA? The former is beyond low. The latter is closer to FMV. We have gotten our clients offers over $15,000/NRA depending on the operator, timeline for drilling, and size of interest.