I just recently received a phone call and the next day some paperwork in the mail from Patch Energy offering about $2,300 for my share in a mineral deed. This is all news to me. It was inherited from my great grandmother, my fathers paternal grandmother. My father passed away less than a year ago and he had no relationship with his biological father so I know nothing about this side of the family. I don’t even know where to start to find out more information about what rights me and my siblings have to the property and what the value truly is. I’m thinking there’s no way $2,300 is a fair offer and they seem pretty eager for us to sell. I would truly appreciate any advice.
I would not sell ever but if you want to sell, I would make sure you know what you are selling. I suspect it is worth considerably more. Put the legal description of the land and let someone advise as to what activity is taking place around your interest.
The best (and in my opinion) only advice to give when one receives an unsolicited offer for a previously unknown mineral interest is to contact an oil and gas attorney to advise you on the offer. Odds are if you have no previous knowledge of the interest you will likely require the services of an attorney anyway. Don’t hesitate to call the mineral buyer directly and ask as many questions as you can. An honest buyer will be forthcoming with any and all information related to the interest and understands the importance of an informed decision by the seller. Fact check what the buyer tells you with your attorney- you obviously don’t want to deal with someone that gives you false information.
I’ll also add that it’s not fair to say that an offer is “considerably low” when all you have is the amount being offered. Would you consider the offer unfair if it was for 20K per net royalty acre without any current horizontal production? You may or may not, but blanket statements are misleading and can misinform mineral owners as to the value of their asset. I’ve encountered dozens of instances where contributors to this forum will make statements akin to the one made above, causing the mineral owner to believe that his or her 1/3rd of a royalty acre is worth a significant sum of money. It’s just as important that the person giving advice be as informed as the actual seller and I would be cautious of anyone willing to make an assessment of the fairness of an offer without knowing the facts surrounding the interest in question.
I might also consider the $2300 offered vs the price of talking to an attorney. But that’s me. I doubt the $2300 is a great offer BUT I also doubt that this means that you own very much at all.
Ask what they are offering you per net royalty acre. That is where rubber meets road.
The W/2 of Sec 22 is getting drilled up as we speak. The E/2 is probably going to get drilled in the next 3 years or so.
You or somebody related to you should be getting paid by Pioneer for the Phillips 22 vertical wells. And same person is in the public tax rolls at X decimal in those wells.
I’m new to all of this, didn’t know anything about it until a few days ago. How do I know what wells are active and when they were drilled? I’ve looked at the map on RRC but I’m not too familiar with it yet. How do I know who’s being paid, is that something I could also access through RRC? I’ve looked a little on the Martin County site for records. From what I can see it looks like a few people have sold already.
I don’t use the TRRC site so I can’t comment on the wells. Phillips 22 wells are the old vertical wells. You could find out who is getting paid by tax records in Martin County for Phillips 22 property.
This is the list of people with less than 1 NRA in this unit, its possible one of them is your people.
Owner
WRIGHT RICHARD R JR,
WASHBURN VIOLET,
HESTER DIXIE L MAYFIELD,
BROWN JON S,
BERGSTROM DAVID,
WRIGHT JOHN CUSTER,
WRIGHT ANDREW JAMES,
LINDER R LLC,
CLIFFORD MARSHA S REV LVG TR,
FREE T L FAMILY TRUST
If the cash would be important, then take it.If you can afford to then hold. The company making the offer does this for a living, so they know a lot more about the situation than you or I can readily find out. They think they will make a nice return on their money or they wouldn’t offer. If you are in a position to hold on for a while then just hold. You’ll probably make a nice amount of money.
I was in your situation.
My advice is to join NARO for $50 and talk to those that know what is going on in the area you inherited the mineral rights.
O&G lawyers are SUPER expensive. I couldn’t even get representation since my interest was so small.
$50 is a great price to get knowledge and knowledge is definitely power in the O&G game.
I would hold on to it, is my advice.
The world is a mess right now, I would not make any decisions until the energy sector settles down some.
If you live in the area, you might go to the cafe in Ackerly, a country store in the area or some other gathering spot and just see what local folk might know. A local oil and gas attorney might be worth a visit. You may pay $300 for an hour’s visit, but might save (or make) thousands. In any case, I doubt the initial offer would be as much as you could get with a little negotiating. My bias is to hold mineral rights and not sell, if that is financially feasible.
I definitely don’t want to sell, at least not right now. I live in California $2300 is pretty much rent for one month so the way I see it even if it’s not worth a whole lot right now who knows what it may be worth a few years. The thing I don’t quite understand with how all of this works is why I had to find out about this from an unsolicited sales offer? Obviously someone has been getting paid but you’d think we would have found this information in some other way. But from what I’ve read on this forum it seems this is lent an uncommon occurrence.
There is a lot of activity in Martin County right now. Several hundred permits each month. Mineral buyers are calling every day to make offers as they try to put acerage together. I don’t know how many acres you own, but you should definately consider having it appraised as $2300 seems awfully low for Martin County if that is a NRA offer. I have seen offers between $10,000 and $30,000 per acre - depending on where your minerals are located.
I don’t know where you are in the section, but the legal description you mention currently has 7 permits for horizontal wells.
Keep in mind that if they are offering to buy them they probably know something you don’t know. Hire a competent professional who can do some research for you. You never know, you might even have monies in suspense just waiting for someone to claim them.
The current wells in the section are old-ish (2013…how is 2013 old already???) vertical wells that are only producing about $6/month per net royalty acre. Assuming you’re probably in the 0.25-1 NRA range based on that offer (let’s assume the best that the buyer wasn’t abnormally lowballing you…just the normal lowball of 10-40% value …) so you’d probably only be owed $2 to $6/month in royalties until these new wells come online. If you own in the W2 vs the E2 of the section, this will make a big difference for you, so that’d be something to get clarity on. You might have a couple hundred dollars sitting in suspense with Pioneer if you’ve never received payment on any well and you’ve owned this interest a while, but probably nothing to write home about yet.
The interest probably has a value to the county lower than $500 so it might not be reported at all in the tax rolls even if it’s recorded properly. That’ll change once these new wells are online though. The person making the offer was probably someone who did title research on the section for the new wells, which is probably how they found you.
But honestly, yeah, what everyone else said above. @NMoilboy and @LanaStraub give sound advice. I have this section with a base value over $30,000/NRA even before these wells come online. If your interest overlaps the W/2 of the section, you might have a couple hundred a month coming your way just in royalties soon, depending on how much and where. But sounds like you need to talk to Pioneer’s owner relations department to figure out if there’s a missing link in title first.
…) so you’d probably only be owed $2 to $6/month in royalties until these new wells come online. If you own in the W2 vs the E2 of the section, this will make a big difference for you, so that’d be something to get clarity on. You might have a couple hundred dollars sitting in suspense with Pioneer if you’ve never received payment on any well and you’ve owned this interest a while, but probably nothing to write home about yet.