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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2013 at 14:27

The something that someone knows is that leasing is underway in a specific area by specific lessees. They may even know the energy company behind the leases. Where there are leases being filed of record there are likely to be offers made to purchase minerals.  I suggest that you go by the clerk of court's office and see what is being filed by whom and where.  If memorandums are being filed that's about all the information you'll see other than the name of the lessor and the term of the lease.  If however there are actual copies of leases on file you can find out the royalty.  The bonus per acre will not be in any public record.  $1500 per acre is a modest offer.  However comparisons to the Haynesville Shale are not applicable.  The Haynesville Shale does not command the prices that it did in the opening years of the play. 

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Permalink Reply by dbob on March 9, 2013 at 14:40

Skip, 

If I understand correctly, it was not an offer to lease, but an offer to buy the minerals.  Value obviously is probably low for a sale, and well above any "going rate" for leasing in the area.  

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2013 at 14:49

dbob, understand and agree.  My comments were based on that interpretation.  Where there is no leasing (and no producing minerals) there is generally very little or no value for minerals, thus no offers. Offers to purchase are generated by leasing.  Buyers understand that there is greater risk in the acquisition of unproven minerals but are sometimes willing to make discounted offers based on their research and experience.  They understand that if they wait until the prospect is a proven play, the price will go up.

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Permalink Reply by Sara on March 9, 2013 at 14:58

Thanks so much for this information.  Yes, this was an offer to buy the minerals.  My friend no longer owns the land, but does retain the mineral rights.  There are currently producing wells on the land, and she receives a royalty check monthly.

My land is about 15 miles SOUTH of hers......I have rec'd no such letter.  I know I am too far north of the Shale, but can always hope! :)

I really appreciate your responses.  If anyone else has anything to add, please post. 

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2013 at 15:05

Sara, shale isn't the only formation attractive to energy companies.  There is quite a bit of leasing activity in northern Webster and Claiborne parishes at this time.  Some of that interest may be related to the Lower Smackover/Brown Dense but I suspect that there are other, better target formations that will be explored in the near future.  The offer your friend received could be related to their royalty income but I don't think so.  I think the offer is related to the location of their minerals and that the location is in an area where there is current leasing.  Buyers use information from leases filed in the public record to make offers.  Since you don't have a lease filed at the court house, you haven't received an offer. 

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Permalink Reply by Sara on March 9, 2013 at 15:16

Got it, Skip!  Thanks tons!

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