I recently received an initial offer by telephone of $300/acre and 3/16 royalty for a 5-year period for approximately 100 acres I own near US 69 and Dead Man Road (CR 317) a few miles west of Zavalla. And I know of one offer of $2,700/acre for mineral rights in the area. I'd appreciate any information others may have on lease offers/royalty offers in that general area of the county, which has not seen much activity until recently, I believe.

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Now youre in the right place, Milton.  $2,770/acre for a sale of your mineral rights is a crummy, low ball offer but don't expect much better until development gets to your immediate area.  If you consider a sale in the future, getting good lease terms will be important to the value.

Which company made you an offer?

I took a telephone call from an individual in the Tyler/Palestine area who expressed interest in leasing but indicated no company affiliation.  I figured the lease document would reveal all the information I needed, but I haven't received one yet, and am beginning to think I may not.  The offer was by all accounts too low and for too long a period, so I'm not concerned.

Milton, the only active Operators in your area are BP / Blackstone (north Angelina - Haynesville / Bossier Shale) and Cobra Oil and Gas (south Angelina - Manning Field / Bossier Sands). Since the Haynesville pinches out in your area, I don't think it's BP (my opinion). You'll get a better deal if you lease directly with an Operator.

As a FYI, bonuses and royalty offers are lower now (compared to several years ago) since the natural gas market is so bad and newer well / completion technologies are more expensive for the Operator than before (although they are more efficient and typically produce at higher volumes). However, I do agree with Skip. Your tentative lease is a starting offer, so you may be able to do better with a counter offer. Regarding competitive lease terms, talk to your neighbors since the leasing will likely involve contiguous tracts to build out the units, and they should be talking to the same broker that you’re talking to.

Offers to purchase outright minerals in the north are mostly dependent on the location of these minerals to major Black Stone tracts that are under development. I don't think the offers are applicable to your area, but I could be wrong. Again, unless you have an emergency financial need, I recommend that you retain your mineral rights.

Good luck.

Thanks again.  I expect to keep the mineral rights.  Even at 15% for long-term capital gains, it's more than I want to pay.  I'll leave that sale decision to my daughter who will inherit.

I am north of you above 103 and when we were offered a lease the terms were about the same from Blackstone.  They came up some but not a lot on the lease money and a little better on the royalty, so I would think that with this being a third party you could do better since they are planning to make a profit also.  We are due a well in the near future and just a month and a half ago Blackstone offered to buy some minerals for 3 times the amount you mention and that was negotiable for a little more but not much.  Hope this helps some.

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