I have received a six figure offer to purchase rights I no idea I had inherited. While very tempting I hesitate based on the advice I have seen on this site and others. This is all alien to me so any help would be most welcome.
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3dogMa, Personally based on your mention of a 6 figure offer and no further info I would highly recommend that you seek advice from a competent O & G attorney. Wetzel County is a good area for current and future development. Devil is in the details. Where is the property, how many ares and particularly how many net acres, what company made the offer, what other activity is near by. Just some of the things to be considered. In order for anyone here to help they will need more details which you may or may not want to share. Lastly, if they are making a serious offer to purchase in the 6 figure range I would not sell the rights and instead work toward a future lease that should potentially yield longer term benefits. At least talk to a lawyer before either decision. Congratulations on your windfall out of no where.
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When a similar thing happened to me i contacted the county and learned i was the heir to an area in a lease, and they had been inable to find the person on the lease. Turned out i got the amount i had been offered by a buyer, and now i get a monthly check for royalties.
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Thanks, I agree there has to be a devil here somewhere. The general warranty deed I received from the potential buyer lists three separate properties in the Church and Grant districts totaling 287 acres +or- a few poles. I have no idea what net acres means. The three deeds date from the late 1800’s, the newest is 1901.
Net acres is the calculation of how many acres of the tract you actually own, and therefore, you are able to sell or lease. For example, your tract is 287 acres +/-. If you and one sibling inherit this property and if nothing in any will states otherwise, then each of you would own 50% of the 287 acres, or 143.5 acres - this would be your Net Acres. However, given the deeds date back more than 100 years, each time those mineral acres are inherited, the total acreage is split evenly among the heirs. So, it is very likely that your net acres are much smaller than the total acreage. This is all calculated by going back through the chain of title that the company’s landman has researched. I agree with dome that given the amount of money offered to you, that consulting an attorney that works with mineral owners in Wetzel County is your best course of action. Good luck.
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Thank you for the explanation. No doubt I should consult an attorney. Are there any recommendations or should I just call any that appear on the net as experts? Do I need to employ a landman? Again, thank you. Being an old lady I never would have thought I’d be navigating unknown waters such as these.
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Most mineral rights properties have accumulated several partial owners over the years that are related to the original owners. Net acres basically refers to the portion or percentage of each owners share. In our case we had 141 acres in the leases of which our net acres were 31.3 or 22.2%. A landman will probably be the person to determine your individual share/net acres relative to the other, if any, related parties. Net acres are then used to determine your payment of a signing bonus when you agree to a lease or leases. The bonus will be based on X$ per net acre. $4K to $5K per net acre is a good negotiating point. Next will be your royalty rate which should not be less than 18%. The royalty rate and several other provisions that modify the boiler plate language in the basic lease are contained in an Addendum which is attached to the lease and is controlling. This is why a good attorney is advisable particularly with the sizable acreage involved. More questions to come I’m sure. To sum up I would definitely not sell your rights as they are potentially worth much more unless there is an urgency for cash now. Everyone’s circumstances are different. Just here to help and pass along what I have learned from similar involvement.
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I have used the services of Kyle Nuttall of Nuttall Legal previously contact info below. There are numerous others. The landman will contact you during lease negotiations. They work for the O & G companies researching the ownership of each individual mineral right. They try to get the best deal for their employer after all the exhaustive work to determine the various owners. Very necessary work but they are not working for you. If you engage an attorney he or she will handle the negotiation of the lease provisions with your concurrence.
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A good attorney is imperative - someone who explains what he/she is recommending and why. We’ve used Chris Blair three times now and he has definitely increased our bottom line. For example, we didn’t know about being able to lease the Marcellus and Utica shales separately. The first time we leased them together. The second time we split them and the proceeds from the leases almost doubled. I’ve also heard good things about Nuttall.
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FWIW, it might be worth adding that (at least sometimes) offers to buy your mineral rights haven’t been fully vetted, and property that you’re told you own may turn out to be incorrect. I suspect many mineral owners simply don’t have the money it may take to hire a landman to verify what you do and don’t actually own. There’s a real risk of spending up to 10 or more thousand dollars only to find out that what you spent can’t be recuperated.
That’s not a negative statement in the slightest in regards to landmen–they have real expenses that cost them large chunks of time, travel, etc. doing all that research for you. Just saying that it can be an expenditure risk if you need to hire a landman to get vetting done.
An offer of buying my erroneous property happened recently in regards to new-to-me property that the wannabe buyer claimed I owned mineral interest in, but when I asked them for the source of their claim, they had nothing to substantiate it. That level of disregard makes these ‘offers’ even more creepy, as no-one wants to deal with people who aren’t even doing their homework at an initial level.
IMO, in most cases, it’s best in the long run to just tear up any such offers that arrive in the mail. Like @M_Barnes has wisely noted:
Any time you get offers to buy, someone knows something you do not know and they plan to make a profit off of buying.
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Definitely talk to an attorney and landman. I know Nick Criado from MountainView Minerals has helped me and others figure out what minerals they own. He does free consults and is always really nice & easy to talk to
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Proceed with caution. Seek multiple opinions. Google Oil and Gas buyers in Wetzel County.
Ask questions: tax map parcels, net acreage & lease status.
If you wish to sell, seek a true-end buyer that is not a broker. A broker does not have the funds in house and will look to flip the contract. Ask for a short DD period of 30-45 business days.
On top of everything consider your financial situation & whether selling now is the best thing for your life.
Good Luck!
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This is like reading a reality TV drama and I am already hooked to know how it all ends!
Happy ending I’m hoping for y’all. And all these wonderful folks who share their knowledge and experience just to help you out. It’s wonderful.
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