Hello. Like others on this forum, we have an inherited small amount of mineral rights in Reeves County - section 42, block 56. I understand this is an active area right now.
We recently received an unsolicited offer to purchase these rights. The offer is $3200 for a half acre. I assume if that’s an unsolicited offer from an investment firm, then the market value is likely higher than that.
Any guidance on current values, or on the ability to negotiate, including countering with a lease plus royalties arrangement versus an outright sale of the mineral rights?
I have been involved in in relative minor ways with mineral rights for many years, but they have brought me a really significant amount of income through time. While I do not know the particular area in Reeves County, I know that a couple of leases that I signed were for considerably more than $3200. I have found that almost all of these unsolicited offers are way below what the property is actually worth. A couple of years ago, I leased (not sold) some mineral rights for a three year lease at $11k/acre for the three year lease. If the operator fails to drill, then the lease expires and there is always a reasonable chance that someone else will want to lease it. That has happened to me more than once. My policy is NEVER SELL your mineral rights, as over time, they have a potential to provide far more income that you would receive if you sold those rights. Good Luck!
You’ll need to provide a little more information before anyone can comment about your area of Reeves Co. RRC’s map lists six different abstracts there that are called Sec. 42, Blk 56. Do you know the abstract you are in (on your deed should be shown as A-XXXX)?
I second J. Howard’s comments about that sounding low for a sale, or a lease. If you’ll pin down the location someone might be able to give you an idea what’s happening in your area.
Thanks for the responses. The insight is appreciated. The description is “all of section 42, block 56, township 2, T&P Ry.Co., Reeves County TX.” Hopefully that helps. Thanks.
You may already have this information, but the section you described is shown on the map as the DW Henderson Survey, Abstract 2215. Below is the Railroad Commission’s map of that area with your section outlined in red.
All of Section 42 appears to be included in a unit BHP Billiton (now BPX) formed called the Gretchen Northrup 56-T2-42, so I’m assuming you are receiving royalties from the four or five gas wells it shows BPX is operating there.
It looks like the last well, the 101H, that they spudded in March, 2020, may not have been completed. In 2014 BHP got permits to drill 4 more wells but those permits have now expired.
If that is the section that you’re in, it looks like a 1/2 acre mineral interest in a 640 acre unit with at least four producing wells should be worth a lot more than $3,200. If you are going to consider selling it you might want to check with BPX to see what they would offer you for it.
Thanks. That’s really interesting. Yes the description on the offer says it’s a half acre interest in a 640 acre tract. However, we’ve never received any royalties and only recently realized we owned this because of an unsolicited offer to buy it. If it is in fact that tract and producing, how might I find out about the royalties? Seems I have some more digging to do. Thanks again. This is very helpful.
I think the logical place to start would be contacting the operator of the wells in that section which appears to be BPX. It is a subsidiary of BP that took over BHP Billiton’s Oil and Gas operations.
If you inherited the mineral interest you will need to gather any deeds, probate records or other information you have on it. Since you said you didn’t know about owning this interest until someone made an offer, some research in the Reeves County deed records may be required to pin down the chain of title to your interest.
Since some of those wells have been producing since 2016 it might also be logical to search Texas unclaimed money site under the names of the folks you inherited the interest from.
Here is a link to the owner relations section for BPX.
