My family member owns 150 acres that he farms. He does not own the mineral rights, however, he was approached by the owner (an oil/gas company) to see if he wanted to purchase the mineral rights. This occurred post election so we know energy-friendly Trump will be coming to office. It would seem to me that owners of mineral rights would be champing at the bit for Trump to take office so they can capitalize on development. With that in mind, I have two questions:
Why would they be interested in selling rights now (post-election)?
Is there any way to determine if there is gas on the property?
Location location location. We cannot really help answer unless you give a state, county, section, township and range or block, abstract section in TX.
I have no idea why politics was brought up, but in my 50+ years of being around the business, Ive never heard of an oil and company approaching the land owner to buy their minerals. If they are anywhere close to a producing area, lookin at a 4-500k transaction on the low end.
I didn’t express any personal opinion on Trump/political party. I mentioned Trump because I think it is pertinent given the fact that he garnered a lot of support in Pennsylvania (and nationwide for that matter) from those who work in the energy sector due to his pro-drilling stance. I think most people would think that a pro-energy president will encourage more development/drilling. Ergo, I would think the value of mineral rights would only increase with an incoming energy-friendly president. (Is that really controversial?)
Given that, it would certainly seem odd (to me, at least, with zero experience in the field) that an owner of a mineral rights would be looking to sell at this time.
I’ve been trying to find the township/range but I can’t seem to locate it. I found the property on my local county GIS site. Is there another site that displays the township/range for any property? The site is located in Pennsylvania.
Attached is a screenshot. (I tried attaching two others but it seems I am only able to attach 1 at a time.) The site located east of highway 376 on that screenshot. The property is located in Lawrence County, which on the Ohio/PA border. I hope this helps. The longitude and latitude is: 40.94797417257232, -80.39379451648024.
Thank you and let me know if you need addtional info.
Aside from questions about future gas, you should keep in mind that no offer or inquiry is real unless you get the details in writing. For example, the oil company may not own 100% under the farm, but only a fractional interest. The gross acres would be 150, but the net may be 1/15 = 10 acres. So you need to verify title. The asking price may be exceed market value so you need to find people who are familiar with local pricing. The minerals may be under lease and then the question is whether the seller is retaining any of the future royalty stream. Or the minerals may have been under production in a larger acreage unit and have been depleted. Or instead of leasing, the oil company may have been participated as a working interest (whether or not it is the operator) and there may be associated liability for plugging wells. Be sure to have any deed reviewed by an oil and gas title attorney so that you understand the provisions.
Not applicable to PA, but other states (like WV) tax severed minerals whether they are producing or not. It is an endless liability (an annual property tax bill) that may not be worth paying for some mineral owners. That’s one example I could see someone offering to sell the minerals back to the surface owner. If the minerals re-unite with the surface they are not subjected to the severed mineral tax as they are no longer severed.
