Received an offer from San Saba for my mineral rights. Does anyone have any experience with this company?
San Saba Royalty is a reputable company.
They may be “reputable” but any mass mail royalty buyer who hopes to get 1 percent of uninformed or desperate mineral owners to bite, is not very reputable in my book.
The company's means of identifying interested buyers is fair game for criticism but it is not illegal nor is it unethical in my opinion. In the case of my clients, San Saba has, in most cases, made offers closer to my opinion of fair market value than most mineral companies and they are professional in their due diligence and closings.
When considering the sale of mineral rights or royalty, it is always a good idea to seek offers from two or more companies. Always require those companies to provide a firm offer in writing and avoid getting into a back and forth dollar negotiation with someone whose approach is to see how low they can push the price. Be sure to perform background research on the company if possible and have an experienced O&G attorney review any written agreement.
Andy, I can't speak for San Saba. There are many acquisition strategies and targets employed by mineral companies. A strategy for the LA Haynesville Shale could be based on one or more areas based on a perception of rock quality. Could be an investor buying under a certain operating company or companies drilling units. Could be attempting to buy where the public record indicates new wells will be drilled in the future. It could be avoiding certain areas or operating companies. Mineral companies typically spread their acquisitions out over multiple play areas or scattered across one play. Of course they hope to realize revenue from royalty payments or to build a portfolio that can be sold at a profit. In the early days of the Haynesville Shale acquisitions were a crap shoot and many purchases turned out to be in areas that were not economic or didn't have any Haynesville reserves at all. Ten years in there is a much greater amount of data that is valuable in deciding where to buy. There are still no guarantees as to the timing of future wells.
I'm unsure concerning your comment regarding "trying to increase their influence". Where mineral companies buy minerals covered by an existing lease, there is no influence beyond the terms of the O&G lease that burdens those minerals. If a company is buying unleased mineral rights in areas not yet developed there may be some moderate influence on development if they have sufficient or key acreage.
Lynne, just to be clear. San Saba sends you checks? That would be a surprise as I have never seen that before. I have copies of letters from several companies that are unprofessional at best but have never seen one from San Saba. In the past there were a couple of companies, Cobra and Southwestern, that sent out deliberately misleading letters with an attached check. This was so blatant that it was fraudulent to many in the legal community. I worked with some attorney's to help get a law passed which prohibited the practice in Louisiana and provided a lengthy rescission period for a seller to cancel the sale and get their money back. Offer letters are one thing, sending a check and the usual accompanying power of attorney/mineral deed is now illegal or at least can be canceled should someone fall for it.
I invite anyone who has been taken advantage of by such a scam to contact me and I will refer them to a law firm that, depending on the specific circumstance, may take a case pro bono simply to have the chance to punish companies or individuals who have taken advantage of someone with this approach.
Skip, we get letters from San Saba and they include a mineral deed and a draft. We do not keep any of their letters, but I am sure the draft will not clear until after they prove up the title. We were contacted by an operator recently inquiring if we would sell our minerals in an old unit. The landman said the only way the unit was economical for new development would be if they could acquire some minerals before drilling. I do not know if they were able to buy any minerals in the unit but they have not permitted a new well yet. Kathy
Thanks for the information, Kathy. It may be that San Saba does that in Texas but not in Louisiana and that's why I have yet to see one. Interesting comment by the landman. I suggest that you ask what company would be drilling the wells. If it is an operator seeking to acquire some minerals and they were willing to make a drilling commitment, I might sell a portion particularly if there is no current activity in the area. Otherwise I'd stand pat.
Kathy, if you are any other GHS member have a San Saba letter as described with an attached check, I would very much appreciate a copy for my file. Please contact me on my personal page and I'll let you know how to send it.
I just sent you a message Skip.