My father is one of 8 heirs of a 93 acre farm between Middleburn and Sistersville, WV in Tyler County. The family leased the mineral rights to a company for $2,600 per acre and 18%, 3 years ago for a 5 year lease. At this time there has been no drilling. Several members of the family have been approached by Shale Mineral Group and they want to buy the mineral rights. The first offer was $4000 and they have increased the offer to $6000. I think from everything that I have read it would be crazy to sell the rights. Does anyone have any advise as to what kind of professional help we could get in making this decision? Or know of anything that is going on in this part of WV?
My family has grappled with the same issue. If you need immediate cash, selling would be the best choice; however, once you sell, your minerals are gone. My recommendation is to give it more time and stick with a lease.
This is the Saudi Arabia of natural gas and it's booming right now. Some companies are just sitting on as much as they can and others have already started drilling. My point is they know there is gas down there they just have to get enough owners together and the permits filed.
I have 2 50 acre plots in that same region. The first one is under a 5 year lease set to expire in 2 years. I've been approached on a top-lease offer (which is a lease that goes into effect after the first one expires) for $6500. Given that I would sell for much higher than $6000 you mentioned. I was told the more contiguous acreage you own the more valuable it is because then the companies have fewer people to negotiate with.
My advice, unless someone really needs the money (to avoid bankruptcy or foreclosure) I would hold onto the rights. 93 x 6000 = 558,000 split 8 ways = 69,750 before taxes--So take a 1/3 of that. One or two more more cycles of 5 year leases will give you that much if not more. If they drill while you still own a royalty then you guys will be golden.
I just got a call from Keystone Buckeye Energy wanting to purchase my lease. He said their terms were 270 points times royalty percentage per net acreage. When I did the math that was only a few thousand dollars above the lease price. The man was very nice, pleasant and professional. I told him we weren't even in the same ballpark. He thanked me for my time.
Late to the party, but I'll chime in with everyone else and recommend that you keep the minerals. They'll be far more valuable in the long run.
Do not sell your mineral rights. Right now Statoil is going through there on outdated time lines from contracts trying to buy the mineral rights at a low price. You have 8 heirs and 93 acres. The amount of oil & gas that they will pooling out will be more than what they are offering.This is why they have increased there offer. The oil & Gas company are trying to get land lock ownership. If your family only owns the minerals right and another person owns the land surface rights there is a chance they have made that person and offer to sale his property to them. If this is whats happening then the oil company still has to pay royalties to your family as long as you don't sell. And they will come at you with a new contract that will be favorable to them. The area you speak of I know real well my family goes back to the late 1700' & 1800's and there descendants still live there. Anderson, Parker, Swiger, Pratt, Shinn, Baker, Underwood.