Replies to This Discussion

Permalink Reply by ken hatcher on July 4, 2010 at 6:24

That was my thoughts Henry.....I've only received offers for 1/2 but nothing over $2000.00 p/a

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Permalink Reply by DJG on July 4, 2010 at 10:53

No fault in selling if that is, indeed, one's only recourse and as long as it is done with full understanding of exactly what the pros and cons are to both selling and keeping one's minerals.


That said, I would adjust your scenario B above a little and add a Scenario C.


Scenario B: Average person sells 1 acre of holdings for $25,000 (if they can get even that type of offer) and uses it to buy a Ford F-150 today with the full understanding that they are actually paying $150K or more of the families long-term assets due to a percieved "need" of having a $25K truck today.

and I would add this equally valid alternate scenario:

Scenario C: Average person understands the long-term value of their asset and chooses to delay their "need" for that 25K truck today. They then choose to instead to buy a junker truck for $1-2K in the short term or, perhaps even, elects to take the bus, with the full knowlege of why they are making that sacrafice today and what the positive long-term benefit is to themself and their family over time.

Again, ultimately, this is a personal decision that nobody can make for you. I am only advocating that whatever one does choose, that the decision be made from a position of fully understanding what the actual long-term value of the asset that they might be letting go for pennies on the dollar.

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Permalink Reply by Earth Mama on July 4, 2010 at 10:13

A yearAnd a halfago mystupid neighbor SOLD hi s rights for a mere 9000.00. Only a small fracton of what they were worth. He has 5 acres in southern caddo. Don't know what the rate is now but I would never sell mine as I have kids that will benefit years from now. I get those letters on rights I own in Texas at least once a month. They are vaguely written and say "please sign here and well do the rest" I destroy them asap. Even if you are desparte for money don't sell your rights!!

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Permalink Reply by sesport on July 5, 2010 at 4:09

I note that a couple of GHS's other questions are as yet unanswered by any "buyers." What is the going rate and how is it determined? Anyone on the "buying" side care to answer?

80)

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Permalink Reply by Skip Peel - Mineral Consultant on July 6, 2010 at 0:48

There is no such thing as "the going rate" and any "buyers" posting prices per acre would be in violation of the site's No Solicitation policy.

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Permalink Reply by sesport on July 6, 2010 at 5:23

Most appreciated, Skip. I know this has been discussed in the past and with a little research using the site's search box it could probably be found with a little effort. Sometimes some of the "new" members just jump right in, though, and put it out front page. lol Just trying to keep it open, honest & balanced so members can make informed decisions.

BTW, since I only do "fuzzy" math, would you concur with D. Gaar's approximation of long term royalty/revenue calculations? Seems to go towards that "How is it determined?" question.

thanks again 80)

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Permalink Reply by Skip Peel - Mineral Consultant on July 6, 2010 at 7:32

My math skills are so fuzzy that I hesitate to endorse the accuracy of any royalty calculator. Even D. Gaar's. I understand the interest in the calculators but find wide fluctuations in the results owing to the variable elements of price and production volume.

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Permalink Reply by sesport on July 6, 2010 at 8:35

Yeah, "fuzziness," bummer Can't seem to find a "cure," so I just find those more capable. We all have our talents and have to rely on others to help out in those areas where we don't meet a "raised bar of expectations." lol

Anyway, that's why I said "approximation," I thought the $5 price seemed about the average price over the past several years. With the exception of the short "boom," which probably won't happen again in our lifetimes.

thanks again 80)

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Permalink Reply by My name is Oil on July 6, 2010 at 8:25

It is unfortunate that folks on here just asume that everybody is financially sound. As we all know, many folks got burned on their bonuses. Not everyone is in a position to just "sit back and wait". There are many folks out there (including folks who are younger than 70 and don't have dying children) that are in a bind and NEED CASH. Selling a portion of your minerals or royalties is good way to get ahead. It is not for everyone, but many companies out there actually pay good money. I am blessed by not being in a position in life to have to sell. I have had several good offers. Skip is probably right. It is a very inefficient market when it comes to selling your minerals/royalties. The decision to sell MUST be based on an individuals financial needs. Not everyone is going to get rich off of their royalty checks, but many folks can get ahead by selling. JMHO.

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Permalink Reply by sesport on July 6, 2010 at 8:41

MNIO - Thanks, I pretty much agree with most everything you say ... it's an individual decision subject to highly personal circumstances & reasons. I've even mulled it over while trying to decide how best to maximize what I (and the community) get from my minerals.

One of the concerns that stopped me short was the thought that once those minerals leave my hands & my control to an investor, there's no telling who's hands & control they may end up in. 'Nuff said.

thanks again 80)

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