I have recently received an offer from a landman with Rosemary Minerals to purchase my mineral acres in Tract 1, Section 5, Township 1S, Range 5W.
He offered $9,750 per mineral acre for one portion that is currently under lease at 1/4 royalty until November 2019. And offered $4,850 per mineral acre for another portion that is under lease at 1/8 royalty.
Does anyone have any advice for me?
Keep the mineral acres. These mineral flippers won’t pay anything near what you will get once they drill, frack and complete!! They’ll get rich not you. If you need help let me know!!
Welcome! There are multiple pending horizontal wells in that township, hence your offers. Section 5 has some of those pending wells. I am hanging onto my acreage near there.
Thank you. Great advice.
Not necessarily sound advice in all cases. There are big public companies doing JVs with companies who have a low cost of capital - meaning they can pay lower discount rates, i.e. they can pay you a lot more. Just be aware of who you are selling to, agree that “flippers” won’t get you the best value. Also, agree that you won’t get paid what you will once the wells are developed…but how long will it be until they get fully developed and yes, if you don’t sell you will eventually collect more than you would receive as a lump sum today otherwise no one would be offering you anything, this is capitalism lol. That said, it can take years if not a decade to recoup what you could receive today and of course the industry is volatile, there is no guarantee any of it gets developed. Just consider the time value of money and the inherent risks in holding. There aren’t only risks in selling. If you don’t need to sell, make your own judgement on what amount is worth not waiting for checks for years. If you do want to sell, just be smart about it. There have definitely been mineral prices in the past few years that have been worth selling at.
Great advice and the truth of the story all the way around! Thanks for your input!
rspitz…sounds like very good advice about everything. Just what we were thinking.
I have interest in section 5 in stephens oklahoma. Section 05-03S-04W. I don’t know much about Oil & mineral rights. I didn’t even know I had them until my aunt called me one day saying they want to lease it for $145.67 for 3 years with 3/16 royalties, then I find out when that lease is up that they already sent me another check for $145.67 for the option to renew for two years. I have called Bearcat Land and they say there’s nothing going on over there, but when I look at Google maps, I see drilling pumps, oil wells and even a brand new one being built. Then I look on Oklahoma Oil &Gas Drilling Activity in Tulsa World News and it says Well, CSW/4 SW/4 NE/4 OF 05-03S-04W - 10 barrels of oil per day, 15,000 cubic feet of gas per day TD- 7,933 feet. So now I don’t know what to think. I was ready to just sale my rights because I haven’t been receiving anything from it, so I called Bearcat Land and the guy said he’d give me $300 for it, it wasn’t even worth that much, but he’s do it to be nice. Well, what I’m wondering is:how do I find out exactly what is going on out there, how much is it worth? And can they be pumping all that oil and gas daily and not have to legally give me royalties? Can they keep it a secret just because I’m innocent to all this? Please can someone help me?? I’ve been going absolutely crazy trying to find out if it’s worth keeping. I need the money, but not if I’m going to lose out on something like that!! And is there a way for me to make some money off my rights without actually selling them?
BearCat is a leasing agent for Continental Resources. They leased quite a bit in section 5 in 2017-2019 and are continuing to lease. That usually means that Continental is planning on drilling a horizontal well, but not always. If they don’t drill those leases, they will lose them.
If I were you, I would hang on at least another year or two and see if they drill the horizontal well.
There is one well producing in the section, but it was drilled back in 1981 and if your minerals are not in the spacing unit for that well, then you will not get paid on it. It is in the SW quarter of the section.
In the meantime, read the Mineral Help tab above and get familiar with the questions and answers already on the Stephens site. Get a handle on the terms used, what to look out for, and ask questions.
Angela, rest assured there is virtually no one in the oil and gas business that would do anything out of the kindness and generosity of their hearts. Judging by the amount they paid for your lease you probably have a very small amount of acreage. Since you are locked in for two years I would wait it out and see what happens in the next 2 years. I strongly advise against doing another 2 year option on a future lease, you’ll be locked in for 5 years and miss any increases in lease offers.
I’m definitely not going to sign anything else concerning this topic at least until I’m more educated about it. Thanks you so much for your advice