Replies to This Discussion

Permalink Reply by William Howard Pritchartt on January 22, 2015 at 16:11

Exactly 110% correct old buddy of mine!!!

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Permalink Reply by Spring Branch,mineral owner on January 23, 2015 at 7:16

My only point was that sale proceeds of minerals or anything else for that matter don't have to go into a money market fund yielding 1/100 of one percent and quite frankly I do not ever recall recommending selling minerals on this web site, but I certainly agree with your advice, TDP, regarding anyone considering selling them seeking expert advice.  A Beanie Weenie can under my bed beats a money market fund!

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Permalink Reply by Joe Aldridge on January 24, 2015 at 2:39

Well said TD. Well said.........

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Permalink Reply by William Howard Pritchartt on January 22, 2015 at 16:40

Back in the late 1980's one of the most successful and affluent oil man in Mississippi asked me if I would be willing to travel to Jasper County, Mississippi to buy royalty in an area that he knew was to be drilled with geology indicating favorable results to be lucrative if the geology was correct and oil was discovered when the test well was logged.  

He believed in incentives and offered me a percentage of anything I could acquire and would cover expenses but no per diem for my efforts.  I agreed to his offer as I had done quite well for us both in Wilkinson County, MS a few months before.  However, I was disappointed in discovering all royalty owners in this area were professional and just as affluent as he and were also wealth gained in oil and gas investments and/or exploration.

I went back to my hotel and called him to we had no chance of acquiring ANY royalties as the minerals/royalties were all owned by professionals.  He responded "I am a professional and I sell minerals and royalty all the time.  Go back to work."

'nuff said!

 

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Permalink Reply by William Howard Pritchartt on January 23, 2015 at 8:23

Never fall in love with anything that cannot love you back.  I love your analogies.

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Permalink Reply by Henry on January 23, 2015 at 1:36

Certainly there are good times and reasonable conditions when one might sell royalties.  But, it might not be now.  With the price of oil and gas really low, the price of royalties will also be low.  One never wants to sell at the bottom of the market.  

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Permalink Reply by benny on January 23, 2015 at 7:06

Who says this is the bottom ? I've seen predictions of $20 oil. If that happens, then this would be a GREAT time to sell. Automatically assuming that prices are as low as they will go right now and also assuming that prices will eventually rise are mistakes. There are no guarantees that either situation is the case. For all we know, this may be the highest oil will be for the next 10 years. Then how many would have wished they had sold now ? What could you do with all that money over the next 10 years ? What would it be worth ?

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Permalink Reply by Skip Peel - Mineral Consultant on January 23, 2015 at 7:23

It would be a mistake to assume that offers to acquire mineral rights always fluctuate in relation to the price of the commodity.  Acquisition strategies vary but many companies are long term investors that make offers based on reserve estimates and projected development timelines  and the day to day price of the commodity is not that important.  I'm seeing interest in proven reserves that remain relatively aggressive.  Interested sellers should be cautious when considering offers that are characterized as the best possible because of current spot or future prices for a barrel or an mcf.

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Permalink Reply by William Howard Pritchartt on January 23, 2015 at 8:18

Some do and that is the best time to buy.  You and I would never do so but watch the companies that sell off assets in the coming month with the crash of crude.

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Permalink Reply by John Weisenhorn on January 23, 2015 at 8:45

I have been reading this repartee and do, very much, enjoy the wit and the wisdom offered to an old man with royalty interests and absolutely NO EXPERIENCE.  Howard, your stories are fun to read.  Must get down your way and have a "shot and beer".

Happy New Year to all.  Maybe this will be the best one yet!

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Permalink Reply by William Howard Pritchartt on January 23, 2015 at 8:56

Please promise you will do so as a man of the cloth will never break his promise.

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Permalink Reply by RBW on February 17, 2015 at 9:13

I had a cousin sell their minerals in 1995.  They owned the exact same interest as me in the property.  

They got 15k in 1995...I was paid over 20k last year alone for the production of those same minerals, that I did not and would never sell.

True story and goes without saying they shouldn't have sold...

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