I recently was approached with an offer to purchase a small portion of my mineral rites in Cass county. I inherited these rites and do not know that much about the industry and ownership. I own 51% interest, non producing,in the minerals on a 397 acre tract in the Thomas Sharp survey, A-951 Cass county. Just curious as to what a fair market value mite be.
I am a firm believer in “just say no.” The guys with the money did not just get lucky. They know something that you likely do not.
You can say that again…
William_Douglas_Archer, that’s what I thought also. Thank you for your input … But how do I go about gaining the knowledge? I have no idea where to begin on this.
90% of the private equity mineral groups from 2010-current have gone out of business due to overpaying for minerals. That line of thinking is simply wrong. Do they have the money? Yes. Do they over pay for minerals to grab acreage to please their Wall St money guys and go out of business? No doubt about it. Can “Joe Blow” ever get the high dollar money offered to sell in hot areas back by holding on to it and the monthly revenue checks? highly unlikely.
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Pam, I have been told that the acquisitions know with absolute certainty that they can flip the acquisition for a minimum 25% profit on day it is acquired and often much higher.
I don’t think you will know with certainty what it is worth but you can see what is going on around your interest. You can look to see permitted wells in areas nearby. You can look for leasing activity in the same property and this around it.
The buyers are simply hoping that you have something you want now. I think of items like taking the kids or grandkids on a vacation, a new boat or a new truck.
If I take there call, I always say “I make more than I spend and there really is nothing I want.” This seems to catch them off guard.
I have also asked them who there money is in their acquisition fund. One told me it was the Apollo Fund out of New York and they only needed a very low return as they had so much capital and they were just hoping to get a little more than banks paid on deposits. I shared that I was surprised as some of their affiliates had invested with me in real estate projects and I had found their cost of capital to be quite high.
Basically, if there lips are moving, they might not be telling the truth.
Thank you Mr. Archer for taking the time to help.
Didnt Apollo exit buying minerals due to overpaying/losing money?
Pam, Rose City Resources has a well in that survey, but not doing good on production. Of course it could be a poorly drilled well. That region between Linden, TX and Lone Star, TX is a hotbed right now for vertical and horizontal wells. I also have minerals in the area. I’ve received offers from $400 - $1500 per net mineral acre, my opinion is to keep it, because if a decent well starts to produce, you could make that money back in just a few months. I would say on average, the vertical wells in the area are coming in from 50-90 bpd. I’ve provided the RRC map that shows the active wells. Small green dot near top center (T Sharp Survey) is your location. I would be surprised if you didn’t have a lease already with someone.
I also found on the Cass County Clerk search where you leased the minerals in 2015 for 3+2 years to Petro-Land Group Inc. Appears that lease has expired. Both Barrow Shaver and Rose City Resources have lease agreements in that survey. I would definitely hang onto it if you can and hopefully get some offers for leasing (not selling) soon. The average lease agreements i’ve seen lately are offering $250-$400 lease bonus per net mineral acre for 3 year term with 1/5 royalty. The field rules in this area need a 320 acre unit. I’ll put a hypothetical money perspective on it so you can see the potential value.
Let’s say you own 1 acre in a 320 acre unit with 1/5 royalty, the well produces 100 bpd, and average price per barrel is $75. 1 / 320 X .2 X 75 X 100. That comes out to about $5/day or $140/month. Just multiply that number by how many acres you own and will give you a decent picture. So if a company is offering $400 per acre to purchase, you can easily make that money in 3 months. That’s why I say to keep it.
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BearCreekBill, thank you for the info. It has answered a lot of my questions. I think my best decision would be to lease. But with who and how would one go about that? I honestly know very little about all of this. I am learning but I do not want to make any decisions without all the information needed to make the rite decision. .so any and all advice, or suggestions are welcome.
Usually when an operator wants to lease your property, you’ll get a letter in the mail. Sometimes they’ll call as well. So really you’re just waiting on them to make a move. You can reach out to the operators over the phone, but it may give them an idea that you’re desperate for quick cash, and possibly not offer you a good deal.
I concur. In the meantime I am going to learn all I can. Thanks again.
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Pam, a new permit came out this morning from the RRC. Rose City is the operator. The permit is for a horizontal drill that actually begins in another lease they have (Cypress). I’m not certain if Cypress has started drilling yet because it’s been in legal battles since around May and didn’t get permitted until October.
The Sharp Survey is only 640 acres and half of that acreage is pulled into leases that are permitted. Mostly the northeastern portion is not under drilling permits yet. Like I said before, I’m surprised if you don’t already have lease offers from either Rose City Resources or Barrow Shaver. Both of these companies are actively drilling this region. I would be hard pressed to sell minerals knowing this. I’ve added a link to the permit if you haven’t already seen it.
https://webapps2.rrc.texas.gov/EWA/drillingPermitDetailAction.do?methodToCall=searchByUniversalDocNo&universalDocNo=496863530&rrcActionMan=H4sIAAAAAAAAAL1Qy07DMBD8mnK0bOcBOewhQnCmpaKHqAc3sVxLThytHR6SP55NEFJJucLFmp0djWc2Cc5BJsEFiBvEtm6j9cOuxa7hR1j4N31S4xgkozWL-l0FZvzrJqvzPCOBhI18fDjUBLMZdmids4N50tjbGLaTxo8vV9Z5EuXQ63j23d7fK-eIKAB1nHDY-2etsD0TdQf8KkwTlm2NJrBRoepflJv0kpE8eXk7gwJO2tghHGycfcjoxyzkar7Ur34U_1Y_fNcuYVRG40W9X28hjs1aN2eFSiYJgqcMKlGlnF6eipktib32-Ot7fgKwLvXUWwIAAA
Hey Mr. Bill: I know just enough about the Texas RRC to be dangerous to myself. Can you tell me how to get the new permits when they are filed? More specifically, Panola, Harrison & Shelby Counties. Thanks for your help Sir. Todd M Baker
@TODD_M_Baker, Please look at my post in the thread posted below. It should explain to you how to find TRRC permits that you are looking for. Mike
Todd i sure can. If someone else doesn’t beat me to it, give me a few hours to get home and ill send you the links. It can be tricky to search for first time users, but fairly easy to use. It basically takes you to a search query with various links. I use the 2nd and 3rd links in the list for most of my searches. One shows you completion information on wells, such as 1st 24hr run on bpd potential. The other will show you the actual permits being filed. Since im on it almost every day, i just search by county. It gives me a list of hundred or so pages, but i just go to the very last page, since by default it goes by ascending order.
I also use a link that takes me to the GIS mapping which is also a helpful tool. (The earlier screenshot in this thread showing the map with all the dots).
I’ll send some screenshots over later this afternoon.
BearCreekBill thank you for the heads up. I’m curious about what they are paying on a lease. Hopefully I will hear from one of them soon.
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Thanks Mikro1. You saved me some time. Todd, the thread Mikro1 should give you what you need. If you don’t know all the information to narrow your search, then choose the county like I mentioned. It will get you to a starting point. Also, make sure when you get back to the search screen after performing an initial search, i find it’s helpful to clear the search first and then type in new data. That clears the form so you don’t search for something you don’t want.
We’re here to help. Happy searching.
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Pam, I found some mineral deeds and paid up leases referring to 296.457 acres. There are references to names Jo Carol Dearman and Elizabeth Crawford Howard. If these names mean anything to you or are related to your inheritance, then I suggest you contact Cass County Clerk. If you are heirship to these names, then there may not be a record of it, which sometimes happens when a will isn’t probated. If that’s the case, you may can fix this through an affidavit of heirship and record with the county. If relatives are deceased, then any paying wells could be in suspense from the operator. You can also reach out to them.