Greetings! I’m so glad to have found this forum! I’ve read through countless posts and feel much more educated than I was in the beginning but still confused.
I recently received a purchase offer from Spring Creek Energy Partners for $40K. (T35N, R68W, Sections 31: W2, & 32:W2) My interest in the described property is only .005 so $40K seems pretty high, but to be honest I have no idea how much land is included. I found the sections on WOGCC and used the interactive map to locate permits, wells, etc. but it doesn’t mean a lot to me. It appears Chesapeake may be drilling or have a permit to drill horizontal from section 29(??) to section 32 but the details are marked “confidential” and I’m not sure what that means.
I would truly appreciate any thoughts on this situation. Or if anyone knows of someone I can contact for expert advice, I would appreciate that too.
By the way, there was a producing well on Section 31 many years ago but the checks were small; around $250 annually as I recall. No checks for a long time though.
Is the .005 net revenue interest or is it your net acreage interest? Is this acreage in a Federal drilling unit such as York? These factors can make a significant difference in your value.
In my experience, unsolicited sales offers mean that they know something I don’t know and they are fairly certain they will make a nice profit off of me from current revenues and future drilling. You are wise to pause and find out everything that you do not know. A confidential well can be held “quiet” for a certain number of months for competitive reasons. There is a lot of deeper horizontal drilling in shale plays under old vertical reservoirs. That is usually what the buyers are after.
Thank You Fred Clausen for responding.
The original mineral conveyance from 1957 reads,
“…GRANTOR… do hereby convey, grant and quit claim unto (4 individuals including my father), a full and undivided two per cent (2%) interest in all oil, gas or other hydrocarbons in and under those lands located in Converse County, Wyoming described as:
Township 35 North, Range 68W.
Lots 1, 2, 3, 4 and E1/2 W1/2 Section 31. W1/2 Section 32.
Reserving unto Grantor the full, complete and exclusive right and privilege of leasing said lands for the production of all oil, gas and other hydrocarbons, together with all rentals, bonuses and other proceeds arising from or accruing to said lands from any source except royalty payable from the production of oil, gas and other hydrocarbons produced and saved therefrom; and it is understood that the amount of mineral interest hereby conveyed is to be deducted from and payable in like manner as any royalty payable to the owners of said lands when any oil and gas mining lease is made on said lands, grantors hereby releasing and waiving all rights and privileges grated under the homestead exemption laws of the state of Wyoming…”
I don’t know if the acreage is in a Federal drilling unit. How does one determine that ?
Thank you M Barnes for your reply. The offer came out of the blue. I was recently contacted by Chesapeake Energy to submit a TIN form, but the representative could offer no information. I may try to contact them again this week to see if there’s anyone that can share any information about exploration activity. Thanks again !
I will repeat what I have said elsewhere with regard to the sale of mineral rights: don’t. It costs nothing to hold mineral rights, as property taxes are on surface ownership. Mineral rights may be worth nothing, but can be very valuable indeed. Consider the fact that so many Native American tribes were moved to Oklahoma (then Indian Territory) essentially because the government saw greater value in the land they were taking than the land they were giving the tribes, in addition to removing “troublemakers” from their ancestral lands that were being taken by White settlers. Most thought much of Oklahoma essentially worthless, as the “Great American Desert” myth about the Great Plains had been refuted, but not expunged from the American imagination. But, that land has often proven quite valuable thanks to the minerals and fossil fuels under it. You don’t know what those mineral rights may be worth. Sale fixes their value and removes the potential. So, think carefully, learn as much as you can before you make a decision. Your circumstances may make sale a necessity, in which case you should get as much as you can. Otherwise, why sell what may prove to be worth far more than you are offered, and that costs you nothing to keep?
A lot of deciding if selling a mineral property is if that property is costing anything to own. In Texas, property taxes will cost over a long period of time verses Wyoming where there is no property taxes. And yes, there is Ad Volorem Taxes on minerals just as there is taxes on surface. The management of mineral properties is also to be considered.
I own mineral properties in 11 states including 178 counties in the state of Texas. I am finished purchasing and now enjoying the royalties so no, I am not interested in buying but also will not sell. If the mineral property has been inherited then I an not interested in selling because of the intention of those who pasted it down to me. I am sure they want my kids & grand kids to enjoy any future proceeds.
As for my own personal minerals, I did my homework and the properties I own produce or did produce enough to justify owning. And yes, it has been nice being retired since I was 48. Now that I am 60, some of the properties such as those in the Permian Basin which lasted long past their longevity are now being horizontally drilled at greater depths and producing nothing we could of expected 15 years ago. If I had sold, I would of regretted it for the rest of my life because we just don’t know what the mineral futures holds. If it isn’t costing me anything then why sell. If I need the money then maybe but if those minerals were purchased or pasted down from past generations then most likely they were meant to be maintained for future generations. When second, third or greater generation owner sell I normally can smell GREED! What was Grandpa & Grandma’s reason for passing them down? I seriously doubt it was for the greed of the one who sold them .
A lot of deciding if selling a mineral property is if that property is costing anything to own. In Texas, property taxes will cost over a long period of time verses Wyoming where there is no property taxes. And yes, there is Ad Volorem Taxes on minerals just as there is taxes on surface. The management of mineral properties is also to be considered.
I own mineral properties in 11 states including 178 counties in the state of Texas. I am finished purchasing and now enjoying the royalties so no, I am not interested in buying but also will not sell. If the mineral property has been inherited then I an not interested in selling because of the intention of those who pasted it down to me. I am sure they want my kids & grand kids to enjoy any future proceeds.
As for my own personal minerals, I did my homework and the properties I own produce or did produce enough to justify owning. And yes, it has been nice being retired since I was 48. Now that I am 60, some of the properties such as those in the Permian Basin which lasted long past their longevity are now being horizontally drilled at greater depths and producing nothing we could of expected 15 years ago. If I had sold, I would of regretted it for the rest of my life because we just don’t know what the mineral futures holds. If it isn’t costing me anything then why sell. If I need the money then maybe but if those minerals were purchased or pasted down from past generations then most likely they were meant to be maintained for future generations. When second, third or greater generation owner sell I normally can smell GREED! What was Grandpa & Grandma’s reason for passing them down? I seriously doubt it was for the greed of the one who sold them .