Replies to This Discussion

Permalink Reply by TAURUS on March 17, 2011 at 7:56

Harryb - Please send me a friend invite so we can talk off to the side. I sent a request on your behalf to a company that does these appraisals. When I get their reply I can copy and paste it to a private message to you here on the forum. Or you can send me your email address and I'll foward it to you. Here are some comments from their website regarding mineral rights valuations. Notice they address both producing and non-producing property.

 

Mineral Rights Valuation Mineral royalties are often valued for Estates, Litigation, and for taxation or taking purposes. Your CPA may value an income stream but the general rule is that those valuations are more than the market value for producing property and less than market value for non-producing (exploration) property. The reason is that production tends to decline with time therefore, royalty income is a declining income stream in most cases. Also, mineral appraisers with a geological background can make some judgments about the long-term potential of such royalty or mineral holdings. To properly do an oil and gas appraisal, the appraiser function is usually best separated from the estimating function. The estimating function sets up the parameters or forecast of the income stream by estimating the remaining reserves, expenses and income associated with oil and gas production. That function is best left to a member of the SPEE or a reservoir engineer or geologist experienced in estimating probable production. The appraising function takes the estimate above and translates it into a traditional appraisal using the Income, Sales, and Cost approaches (actually the Cost Approach is rarely applicable.)

• ▶ Reply

Permalink Reply by P.G. on March 18, 2011 at 12:37

Who is going to pay what the minerals could be sold for for just the "RIGHT" to mine them?

Seems everyone keeps tallying up the value of the minerals as the price for the right to mine them....

 

• ▶ Reply

Permalink Reply by Harryb on March 19, 2011 at 9:04

Soccer mom - I do understand and it is for that very reason that I wrote in questioning P&A's response to me.  Quite frankly I think it is appaling that a company would tell me there is no value when there is and they just don't want to do the job.  Don't you think I should have been given the option to decide whether I want to spend thousand of dollars.  It's no wonder people in the oil/mineral business have such a bad rap.  Nobody is honest with anyone even on something like this.  You should let your dad and uncle know, that there are people like me who are willing to pay for services even if cost money.  If it something that I need done I really don't see how I have an option anyway.  I'm sure if I look hard enough I can find someone who is willing to take my not so "small job" in the middle of a "big play" and when I do, I will gladly pay the person the money they are entitled to for the job!!

• ▶ Reply

• ‹ Previous
• 1
• …
• 5
• 6
• 7
• Next ›
• Page