I have been given an offer to buy my mineral rights. Has anyone else had offers like this? If so, what is the going rate?
If they are buying, is that a good possibility there is something good coming forth that they know about and I don't? Kind of makes me want to keep them to see what happens.
Comments? Suggestions?
If you get offers, it does usually mean that something has happened or speculators think something is about to happen. It is better to bide your time and see what develops. The first offers are never the best, some speculators are not honest, some are, etc. Get better informed about the value of your assets, then decide. We never sell our minerals-yet and it is going on a hundred years. However, that being said, everyone has to make their own decision. That is what this mineral board is good for. Get feedback, find resources, get informed!
Thanks for your reply. What resources are best to get more information about the value of your assets? How does one find out what might be happening? Where do I check or who can I contact?
Uta, if you don't live on the land over the minerals, you could already have a well and not know it! Nowhere does it say they have to tell you they drilled a well without consulting you, trying to lease you or anything else. Using the NDIC O&G Division site is a good way to track what is going on if you don't live at the site of your minerals. The (free) GIS server map will show wells and permits. I think the $50 per year for the basic subscription to the NDIC O&G Division is a bargain because I can look at the production of any well in the state that is off the confidential list and even delve into the wellfiles and determine how many frack stages were done and the propant used whether ceramic propant or cheap sand. Simply put, the higher the productive capacity of your minerals, the more they are worth and it's something you want to know.
Uta, you can use the GIS map yourself and it's free. If you will give the legal description of your minerals, I'd be glad to take a look at the surrounding area for you. I frequently get to give people the happy news that they have a well and just two weeks ago I was able to give someone the news that they had 6 wells when the people who were trying to lease him only told him about 1 well, H'MM. Let me know if I can help.
There are many extremely good wells being completed in Williams county.
Uta,
There are many buyers operating in your area of North Dakota and Montana and each has a different business plan. Some will offer to buy at fire sale prices from needy sellers, some want a piece of the long term production income anticipated from the Bakken, some just want to flip the ownership for a quick profit, some want to buy the long term production potential and participate in the drilling of the wells, and some just like the gamble of buying something and holding it for the pleasure of ownership in a highly touted commodity. The buyers all have one thing in common, they owe it to their backers to buy as cheaply as possible. The owner owes it to himself and his family to act like an educated seller by investigating the drilling an production activity in there area and the reasons behind the activity then combine that information with your personal desires, needs and expectations. In that way, you can set a price that is uniquely yours. Unless you expect to live forever, everybody has a price at which they would prefer the after tax income to the pride of ownership. Your price may be different than your heirs or beneficiaries. The key is to act like an informed buyer, educate yourself so you know what a fair price is to you. Buyers may not agree but that doesn't mean the minerals are not worth your price to you. Keep in mind that things change for buyers as well as sellers but knowledge is always power in getting what you want.
I hope the Red is staying within the banks this year. Now there is something nobody can do anything to control.
Thank you. I live in Grand Forks. We sold the farm after my brother passed away. And yes, there has been another well added that we didn't know about. Thank you for the information. Uta
r w kennedy said:
Uta, if you don't live on the land over the minerals, you could already have a well and not know it! Nowhere does it say they have to tell you they drilled a well without consulting you, trying to lease you or anything else. Using the NDIC O&G Division site is a good way to track what is going on if you don't live at the site of your minerals. The (free) GIS server map will show wells and permits. I think the $50 per year for the basic subscription to the NDIC O&G Division is a bargain because I can look at the production of any well in the state that is off the confidential list and even delve into the wellfiles and determine how many frack stages were done and the propant used whether ceramic propant or cheap sand. Simply put, the higher the productive capacity of your minerals, the more they are worth and it's something you want to know.
Uta, you can use the GIS map yourself and it's free. If you will give the legal description of your minerals, I'd be glad to take a look at the surrounding area for you. I frequently get to give people the happy news that they have a well and just two weeks ago I was able to give someone the news that they had 6 wells when the people who were trying to lease him only told him about 1 well, H'MM. Let me know if I can help.
There are many extremely good wells being completed in Williams county.
Uta, it was my very great pleasure.
Uta Thompson said:
Thank you. I live in Grand Forks. We sold the farm after my brother passed away. And yes, there has been another well added that we didn't know about. Thank you for the information. Uta
Thank you, Gary, for your reply. The Red so far is, but with this rain, could bring trouble.
We have been made a good offer. For my siblings, they may consider taking the offer due to their age. I am considering the offer. We don't own very much of the minerals, as they were sold long time ago. Do you manage minerals for businesses or individuals? I am looking for resources to help me and my family to make an informed decision for our future. What resources do you suggest? I appreciate your assistance. Uta
Gary L. Hutchinson said:
Uta,
There are many buyers operating in your area of North Dakota and Montana and each has a different business plan. Some will offer to buy at fire sale prices from needy sellers, some want a piece of the long term production income anticipated from the Bakken, some just want to flip the ownership for a quick profit, some want to buy the long term production potential and participate in the drilling of the wells, and some just like the gamble of buying something and holding it for the pleasure of ownership in a highly touted commodity. The buyers all have one thing in common, they owe it to their backers to buy as cheaply as possible. The owner owes it to himself and his family to act like an educated seller by investigating the drilling an production activity in there area and the reasons behind the activity then combine that information with your personal desires, needs and expectations. In that way, you can set a price that is uniquely yours. Unless you expect to live forever, everybody has a price at which they would prefer the after tax income to the pride of ownership. Your price may be different than your heirs or beneficiaries. The key is to act like an informed buyer, educate yourself so you know what a fair price is to you. Buyers may not agree but that doesn't mean the minerals are not worth your price to you. Keep in mind that things change for buyers as well as sellers but knowledge is always power in getting what you want.
I hope the Red is staying within the banks this year. Now there is something nobody can do anything to control.
Gary L Hutchinson
Minerals Management
Uta:
Where are the minerals located, what is the offer on the table, and what percentage mineral interest do you own? All of these criteria play into getting the maximum value for your minerals. Has the person who contacted you asked you to just sell the minerals, or is he interested in leasing them if you don't want to sell? Stop by the county recorder's office and see what's going on. Ask one of the clerks to help you with finding out who's leasing or buying, and where. If one person has contacted you, there are probably several others that would have interest in making a better offer. If you just knew who they were, you could maybe get a better deal, so some researching at the Recorder's Office might pay off.
My years of experience have shown me that there are many good reasons to sell mineral rights. There are just as many good reasons to hold onto them. It all depends on what your financial goals or needs are. Only you can determine that. While Mr. Barnes suggests biding your time, that may not be an option for you. Additionally, I've seen tremendous offers made to mineral owners in shale plays. After they turned them down, hoping they would get more if they waited, the first wells that were drilled turned out to be dry holes. After that, no one wanted what they had, to either lease or buy. By waiting for more money, they lost the $125,000 that they could have had originally. It's a hard lesson to learn, but don't get greedy. The best transaction is not where one party wins at the expense of another. The best transaction is always one where both parties win. They may not have gotten everything that they wanted, but each side got enough to make the transaction satisfactory.
As far as value is concerned, there are so many factors involved it would be impossible to list them here. Nor would you be able to make the contacts, garner the information and develop the experience you'll need to make an educated decision in the time you have. Joe Doe may have gotten $150 an acre for his minerals, but depending on location, your minerals could be worth substantially more. They could also be worth substantially less. The current land grab for minerals going on now is in the various shale plays around the country. If you happen to be in an area where one of these is happening, you're in a better position to get better money, for either a sale or a lease.
Rule of thumb dollar values also vary. If there is a producing well on the parcel you own, then the minerals are worth anywhere between 5 times to 12 times one year's worth of your share of the income. If the well has already been producing long-term and is fairly well depleted, it may be worth less than the going rates. But then again, if the well is an old conventional well drilled in a played-out formation, it may still have a great deal of value if it's located within an area known to be producing from one or more of the "hot" shale plays. Unfortunately, getting that information is often very difficult, since no oil company wants any other oil company to know what they're up to.
As a landman who is connected to quite a few geologists working throughout North Dakota, Wyoming, Montana, Colorado, Kansas, Nebraska, New Mexico and Utah, I've been able to get information on a number of different areas for my clients. Most geologists have a pretty good idea where the plays and prospects are trending and a good landman has a few tricks up his sleeve to find out what the going rates are.
If you have a large mineral interest, I suggest you work with a qualified landman to help you get the most out of what they're worth. You may also use the services of an oil and gas attorney who can help you get the contract set up properly. If it's a small interest, you may not find it financially efficacious to hire out these services. A reputable landman and/or oil and gas attorney should be able to tell you (without charge) whether or not the services each provides would be worthwhile for you.
Mr. Barnes, Mr. Kennedy and Mr. Hutchison have all touched on good sources of information for you to search out. Don't forget the surrounding neighbors, the waitresses in the cafes, and the local hairdresser. If someone is attempting to buy or lease your minerals, there is a good possibility that more than one person or company would be interested in what you have.
If I can help further, please let me know. Drop me a line at [email protected]. To help you I would need the legal description, the percentage of the mineral interest, what you've already been offered, if you've been offered a lease or an outright purchase only, and if there are any wells on the parcel(s), producing or not.
Thank you, and I wish you the best of luck
Tom Coalson
Uta, it occours to me that if you have a new well they haven't told you about yet, if you collected the royalty off of it, you may not have such a great need to sell it? In any case, if it were factored into the sale price it should drive the price up considerably if it is a decent well.
Sale of oil is reported in general statistics, whether a well is confidential or not, it is just a pain in the rear to search general statistics because it is not really orderly but it can be done with enough patience. If the well is off the confidential list you could call the NDIC, I generally find them helpful and I think they wouldn't mind telling you the production.
Uta Thompson said:
Thank you. I live in Grand Forks. We sold the farm after my brother passed away. And yes, there has been another well added that we didn't know about. Thank you for the information. Uta
They let us know after it had been producing. Looks like they put one a short distance from the other.
We have a totally different party that is wanting to buy the minerals and it is not the company that we have the oil leases with.
r w kennedy said:
Uta, it occours to me that if you have a new well they haven't told you about yet, if you collected the royalty off of it, you may not have such a great need to sell it? In any case, if it were factored into the sale price it should drive the price up considerably if it is a decent well.
Sale of oil is reported in general statistics, whether a well is confidential or not, it is just a pain in the rear to search general statistics because it is not really orderly but it can be done with enough patience. If the well is off the confidential list you could call the NDIC, I generally find them helpful and I think they wouldn't mind telling you the production.
Uta Thompson said:Thank you. I live in Grand Forks. We sold the farm after my brother passed away. And yes, there has been another well added that we didn't know about. Thank you for the information. Uta