Replies to This Discussion

Permalink Reply by koda on September 26, 2010 at 1:34

BirdDawg
I think it is stupid for some one to sell there minerals to but if they want to buy some then lets get the money up there where it worth while. I just added three 000 to there offer , It could just as well have been $15000. The point I was trying to make is that $1500. Is a small amount to offer for something that could be a lot more valuable . I was not giving anyone advice but let people know that there minerals are worth more than what they are offering

Permalink Reply by BirdDawg, plain ole' idiot on September 26, 2010 at 2:24

There is a lot of difference in $15,000 and $1,500,000.

Permalink Reply by Two Dogs, Pirate on September 26, 2010 at 5:22

Hey BD it ain't no more ridiculous than $1500.00.

Permalink Reply by BirdDawg, plain ole' idiot on September 26, 2010 at 8:41

I don't know TD, I think it is more ridiculous.

Permalink Reply by ledlights on September 26, 2010 at 10:55

All depends on your perspective I guess. Let me make a ridiculous attempt to quantify ridiculousness:

If the property experiences maximum well drilling and decent gas prices the payoff per acre will probably be an order of magnitude less per acre than the 1.5 mil or somewhat higher. (Multiply that by any large gas price increase). $1500 per acre may be about 2 orders of magnitude on the low side. Allow the buyer at least one order of magnitude for the risk they are taking. The 1.5 mil could of course be earning a lot of money in other safer investments also. I therefore declare both extremes to be equally ridiculous.

Permalink Reply by ken hatcher on September 26, 2010 at 0:42

Oh yes, they did say you could keep your lease bonus. LOL

Permalink Reply by Henry on September 26, 2010 at 1:02

TD,P,
I agree with your assessment of the offer of $1500/acre for half interest. We all agree we would not sell our minerals for that low offer.

But, let's turn the tables. If you were going to invest your hard-earned money and buy someone's royalties. What would you be willing to pay? Given the risks of a bad well (they do happen), and the uncertainty of when wells #2-8 will be drilled, I cannot say I'd be willing to risk more than about $3-4k/acre.

I don't have a clue what royalties are actually selling for. Do you have any idea?

Permalink Reply by ken hatcher on September 26, 2010 at 4:21

Whatever it might be it would be a long term speculation, maybe something for your children. These offers in the mail border on legal larceny.

Permalink Reply by Jack Blake on November 5, 2010 at 8:23

A letter came in the mail offering Jack Blake 6k/acre for 20 acres for his minerals about 4-5 months ago (after the well was fracked and waiting on P/L). JB will never sell his minerals, but for someone who needed cash 120k may be worth taking. If a Cobra type company offers 6k/acre JB says it must be worth a minimum of 10 times that.
JB will wait on the $1.2 mm plus to come in slowly over the next 20-50 years. Hopefully the money will still be coming in after Jack is pushing up daisies.

Permalink Reply by Two Dogs, Pirate on September 26, 2010 at 10:27

The only real offer that I have seen that was serious was right after Thanksgiving of 2008. It was for land leased to CHK the Lessor had 1/5 royalty and the offer was $18,000.00 per acre. The land was between Keatchie and I-49 in DeSoto and it was a CHK company making the offer, you had to do some research to find that it was CHK making the offer.

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