I’ve heard people say never sell mineral rights. I’ve also heard it said if you want to remain happy, stay out of court. I have a 1/4 Interest of 160 mineral acres in Cutbank, MT. There is at least one Injection well and one fickle slightly producing well, both around 5000’ vertical. Also at least 1 shut in well. There have been no royalties come in since 2008. If there is brine being produced but no oil, does this mean the operator is disposing of brine for others? I believe, but am not sure, that the lease for my interest is expired. I solicited a sale offer from the current operator (trespasser?) and have received one. The chief value to the operator I believe is in the injection well. Generally speaking the oil in this formation is “gone” in terms of todays technology. The whole thing is complicated by the two other owners, at least for me but sounds pretty comomn with inherited mineral rights. Do I take the bird in the hand or hand money to a specialist to tell me what’s really happening here?
Well, the 2 most important questions are, how much are they offering per acre to sell and has there been any horizontal drilling activity in the county over the last few years?
Yes. There has been horizontal drilling and fracking. The offer is 10k for 40 mineral acres. I have not countered yet. I could probably get a couple bucks for the surface. I would assume land with undivided interest and no mineral rights doesn’t have much value except possibly to one of the other owners. My understanding is, for injection, mineral rights are all that is needed in Montana where in some states surface rights are needed.
I’ve noticed there is very, very little in this forum on the Cut Bank, MT formation. Its is a WWII era field that produced meaningfully into the 80s. The first well spud date on this property was 1939 I believe.
When you sell mineral rights, it would include any minerals, not just oil. It might be worth finding out if other minerals, such as those for electric battery manufacturing (lithium, nickel, cobalt, etc) have been found on the property before agreeing to sell.
Keep in mind that oftentimes there are tax incentives to keep things going. You can make more money off tax credits than you do producing oil. It’s not always best to own minerals it’s best to squeeze the operator. But u have to know how
How does one learn how? It sounds like a job and I’m just not sure there is enough value there to make it worth while. Guess I just don’t know where to start.
To answer the question you asked, I think it depends on how much you are being offered. If it a decent amount, then consult a lawyer or knowledge oil person who knows what is going on in the area. You can also solicit other bids to see if the offer is the market rate, or is too low. I.e,. if five potential buyers offer you about $1000, that is probably the going rate.
Ive never had any interests in Montana/nor injection wells anywhere. So I have no prudent advice to give. IF youre wanting to sell surface and minerals, Id suggest looking at the county clerks/treasurers site/newspaper where they list land sold to determine the going rate for surface before responding to the mineral buyer side of it.
You start by assuming nothing is proven yet. And there is lots of downside.
You can limit the sale specifically to oil and gas minerals with a properly drafted MD.
If you are attempting to sell in a non-active area, then contact adjoining landowners, operators and such may serve to develop the best market. Doing this may require you to set a price or you can set it up in an auction process. Good luck.
If you would like to share the section, township and range, folks on the forum can comment on the activity nearby.
If brine is being produced (fluids coming up), then it is not being disposed (fluids being stored down underground).
Mineral rights are dominant over surface rights in most cases, so the operator probably had legitimate leases and is not trespassing.