My dad died about 5 years ago. There are 4 heirs. We just found out yesterday through a letter that he had interest in the above property. We don’t know what percentage he owned. A company has sent us a letter wanting saying they are interested in discussing with us an offer to purchase his portion. We know nothing about how this works, if we should keep it, if we should sell it, how much it is worth or anything else. I don’t think he has received any money from it for many years (at least 5 since he died 5 years ago.) Can anybody give me a clue as to what it is worth, how much should be offered, or questions we should ask the company trying to buy it? Any information would be greatly appreciated.
You should not sell your mineral rights until you have some knowledge of the production potential.
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How do I find out about that? Or any other information I may need to know? Jimmy
This link will open the TX RRC’s GIS Map Viewer on a plugged well in your section: https://gis.rrc.texas.gov/GISViewer/index.html?api=03330849 Use the magnification bar to zoom out a bit to reveal the oil activity around you. I had multiple offers on a small interest in another county. It turns out that a number of wells were drilled.
Mr. Plunkett is correct. Do not sell unless you know what you have and what it is worth. I found only one well in the Northeast corner of Section 409 and it was plugged in 1985. Our family owns minerals in 4 sections about 2 miles Northwest of Section 409. So I am somewhat familiar with the area. Since I am also interested in who is making offers in this area, if you let me know who sent you the letter, I will scope them out for you. Often, companies will send out letters to many mineral holders hoping that some will sell cheap. Remember, minerals don’t cost you anything unless they are producing.
Thank you for your response. I know absolutely nothing of this type of thing. The letter was from CPC Petroleum, LLC. It also says Hog Creek Royalty, LLC. In an email I received today it says: Undivided 15/653.48 mineral interest in said lands. 15 Net Mineral Acres. Subject to undivided 1/3 Non-participating royalty interest reserved in a Warranty deed dated May 1, 1945 and recorded Vol 44, Page 26 of the Deed Records of Borden County. Last time the interest was leased was in 2012. One well was drilled on the property in 1982, but it was plugged and abandoned in 1984. There has been no production since. Then e sent a runsheet covering my chain of title. That is all the information he sent me. Any help would be appreciated. Thank you.
You received a lot more information than most receive with an offer. I will assume that your father owned a total of 15/653.58 undivided mineral acres. (As opposed to that being just your share) Being subject to a 1/3 Non-Participating Royalty Interest (NPRI) means that the four heirs own 15 acres for the purpose of leasing rights and receiving lease bonuses, but only 10 acres for receiving royalties. Being burdened by an NPRI can greatly affect the value of your minerals. The Railroad Commission website doesn’t show any current development in or around Section 409 but that doesn’t rule out anything since the site is often a few months behind. You might want to contact CPC Petroleum and see if they will give you a ballpark amount per acre. Also, you should avail yourself of some of the excellent information on this site about mineral rights. Look first under the heading of “Mineral Help” at the top of this page.
Thanks again for getting back with me. You are correct in the assumption of 15/653.58. He called me yesterday and mentioned about 1/3 going back to the owners otherwise it would be worth a lot more. I asked why he was interested and he was honest and said it was because things were going on around the area and it was for future production. He offered me about $750 per acre for my part which came out to about $2500-$2700. I don’t know if that is good or not. I told him I need to check into it and I would get with him later this week. He said I was smart to have things checked out. Any ideas if this is a good price or not?
I do not know if $750/NMA is good or not. I would have to have a lot more information on the area including geology etc. I always ask this question: Do I need the money? If not, I see no reason to sell. Everyone’s situation is different, but is clear that CPC Petroleum, LLC thinks that buying your minerals will make them money. I would wait. Also, when the time comes, and someone offers to lease your minerals, get professional advice. If nothing else, come back to this site. There are some very knowledgeable people here and will be happy to help.
$750 is a low purchase price. I use a crude rule of thumb when valuing non-producing minerals, when there is active leasing in the vicinity. 3-5 times the lease bonus. Recently I leased a few sections north, but also in Block 97. I received $750/nma for the lease bonus. Applying the rule suggests a value of at lease $2250/nma.
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