My family owns 480 acres mineral rights 7N60W S15E1/2 and S14NE1/4. The 480 is split between 6 family members. One of the members needs to sell and others are not in a position to purchase. We are currently leased and it expires in 2024 with option to extend 2 years. The acreage was recently permitted, but those permits have expired. How do we go about securing the highest possible price?
Thank you
Price will depend on terms of your lease(royalty, exstension payment etc) and exact location. Since the permits expired and were not drilled, unfortunately they will not help the value really. You can plan for at least 3-4x the going lease rate though. They are worth more if there are active plans to drill. With the current state of things in colorado, they are making that more and more difficult to do with all the new set backs and regulations. It appears it may only get worse. Do you know why the wells werent drilled? Is there any homes, water, wells etc on the surface of the property and surrounding areas that may not allow for drilling?
Thank you, Cole. There are no constraints such as surrounding surface use, homes or wells. It seems that makes our area more desirable than most in CO. I suspect it has not yet been drilled due to production expectations. Two years ago, one of our owners needed cash quickly, so we leased for less than we might have 6 months earlier or 6 months later.
Do you guy’s do everything as a group? Just because one needs to sell, does not necessarily mean you all need to.
We have negotiated and leased “in tandem” in the past, but that may change. We just might all sell for the right price. Or only one for the best they can get.
Most of the active buyers today want to see the minerals under lease and permits filed by an active operator. Given that you only have one of these 3 conditions, you will struggle to find an aggressive buyer unless there is good offset production. The other consideration in a possible sale would be the acreage concentration in a single purchase if you want to sell the entire 480 acres of minerals.
Thank you, James_Garner. It is looking that the whole group is not ready to make a sale.
Tpg capital contacted us about selling. They are an investment firm. Is this common?
Memaoil: I am not sure why you are asking me. I don’t know anything about Tpg capitol.
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