I have inherited ground and mineral interests in Reeves County.
Specifically PSL, BLK C1, Sections 27 and 28.
They have been under lease with Patriot, due to expire (be continued) this year.
I am from the midwest where mineral rights area a complete unknown.
After reading this forum recently, I find that we left a ton of money on the table when the lease was done 4 1/2 years ago...All is a gift, and we are appreciative...
The people leasing the ground made note of interest in buying the ground. They also showed marked interest in the mineral rights, but my Aunt and I (who co-owns) will hold the minerals indefinitely.
The question is; since we all live thousands of miles away, what is the value to holding the non-tillable ground?
The lease is locked up at a nominal amount, and I understand that additional leases may arise for access, but is there an advantage to the lessor to have the land? Will that make them more interested in drilling multiples?
And what is the 'real' going rate for land only? Between my Aunt and me, we have 2 sections.
Trying to understand the advantages and disadvantages as well. I do know that the surface owners are typically paid for “damages” to the surface. I take it that you do not have a surface use agreement? Or is that already spelled out in your lease.
Did the state get half the bonus when you leased? If so, you cannot sell the surface and retain the mineral rights.
Look at the GLO map, and select aerial view to get a Google map satellite view of what the land looks like. Some areas of Reeves have good underground water. There is a lot of vacant, unused land in Reeves. Maybe you can lease the surface to an adjoining rancher, just to have someone keep an eye on it.
Very good point regarding Classified Mineral lands. Some people will try and buy the surface from you knowing the minerals will come with the sale.
Wade Caldwell said:
Did the state get half the bonus when you leased? If so, you cannot sell the surface and retain the mineral rights.
Look at the GLO map, and select aerial view to get a Google map satellite view of what the land looks like. Some areas of Reeves have good underground water. There is a lot of vacant, unused land in Reeves. Maybe you can lease the surface to an adjoining rancher, just to have someone keep an eye on it.
There are advantages to owning the surface and the minerals...without a doubt. We've found that it keeps you in the loop as to the actual operations...if any occur...among other things. However, being an absentee surface owner is an obvious disadvantage.
I'm familiar with the area and can tell you that 2 sections of land is most valuable to your immediate neighbors. You should attempt to locate these folks to propose a lease or sale. There are some large ranches in this area that are always looking to tack on surrounding acreage. I can tell you that a surface lease in this area is worth about $2-$4 an acre to a rancher (I've seen jackrabbits carry canteens out here).
If you decide to not sale and when you lease this acreage again you need to explicitly demand a surface use agreement.
If you need further help with any of the above I'd be happy to discuss. Just shoot me a message
In regards to the bonus, there wasn't one. This lease came to my elderly Mother and her sister at a time when my Mom was fighting cancer (a battle that eventually took her.) Both the fact that she was quite infirmed and my total lack of knowledge on the idea of mineral/land leases put us in a position of weakness. We all looked at it as a gift as the ground/minerals hadn't produced any measurable benefit in the 90 years that our family had owned it.
The people who are leasing it apparently own the adjoining property. They have noted that we are 'land locked.'
They have shown interest in buying the ground only, for 'ease of operations.' They have noted that fewer people would be interested in buying the ground singularly because they have the mineral lease and own the ground surrounding. Does this sound reasonable, and what is a fair price? I live 1500 miles away, and wouldn't consider it tillable...nor would I get the chance to hunt it or play on it. Take the cash now, or collect leases for years? My Aunt has interest in 'cashing out' on the ground. Any thoughts on fair value would be appreciated.
Really hard to say without looking at it on the ground. Whether the surface is landlocked is a complex determination. You might look at the GLO map and switch to the aerial view to get a better idea.
There are advantages to owning the surface and the minerals...without a doubt. We've found that it keeps you in the loop as to the actual operations...if any occur...among other things. However, being an absentee surface owner is an obvious disadvantage.
I'm familiar with the area and can tell you that 2 sections of land is most valuable to your immediate neighbors. You should attempt to locate these folks to propose a lease or sale. There are some large ranches in this area that are always looking to tack on surrounding acreage. I can tell you that a surface lease in this area is worth about $2-$4 an acre to a rancher (I've seen jackrabbits carry canteens out here).
If you decide to not sale and when you lease this acreage again you need to explicitly demand a surface use agreement.
If you need further help with any of the above I'd be happy to discuss. Just shoot me a message
Tyler,
I want to piggyback off your statement. My family has a section located in Block 57-1, tract 28, abstract 4367. We do not live nearby. We would like to lease the property to maintain an ag exemption. The former lease ran out and we have been unable to find a replacement. Do you have any suggestions for finding a rancher in the area who might have interest?