Replies to This Discussion

Permalink Reply by Shaylon on June 24, 2008 at 5:57

My father has been offered 16k for his rights on a lot in Shreveport. He is considering selling it if they upped their offer. Is the payout on small house lots in the city expected to be large?

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Permalink Reply by BeatBama on June 24, 2008 at 6:19

how much have they offered to lease it? the only reason that companies offer to buy the rights is because they think it is a good investment and they will make more than 16K off it in the long run.

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Permalink Reply by nisie, not a happy camper landowner on June 24, 2008 at 6:22

Phillips offered me $2000 per acre several months ago. If I would have been someone that didn't know better they would have made a killing off of my land.

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Permalink Reply by Kassi on June 24, 2008 at 10:43

In my oppinion one should NEVER sell their mineral rights. If you organize your neighborhood and hang on a bit the lease offers will possibly be as much or more than the sale offers. If you sell your rights they are gone forever (if production occurs and gone for at least 10 years if no production occurs). It can also decrease the resale value of your home.

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Permalink Reply by DrWAVeSport Cd1 on June 24, 2008 at 13:12

Conveyance of your minerals, IMO, is strictly a straightforward proposition.
If you can receive $80Million for approximately 2,000 (mineral) acres of land...and still own your land, then IMO, one would make a killing off of the cash investment and would NEVER need to second guess that decision. The "risk" is GONE for the aforementioned mineral owner, Haynesville Shale or no.

However 99% of the mineral owners in NWLa sit nowhere near that kind of financial opportunity hence the advice around the table about leasing for bonus and royalty moneys. The "risk" will always sit at this table - individuals who own 1/2 acre, subdivision homeowners, small acreage mineral owners, even those who band together in "associations" or put sections of lands together for bids. The "risk" sits within these smaller contracts. Will I ever see a royalty check? Will I be able to re-lease in 3 or 5 years?

If you feel you need to avoid the "risks" involved in this O&G venture of leasing with these O&G or land-leasing companies, then (IMO) you need to receive the type of moneys for the "sale" of your mineral rights that makes YOU feel you have completely avoided any "risks" and can invest enough cash to make you never second guess your decision. What is that PRICE POINT? I cannot answer.

It is your decision. But, it is a decision (in my humble opinion) that most of us can make with ease: Lease!

DrWAVeSport 6/224/08 p.m.

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Permalink Reply by Snake Stewart on June 24, 2008 at 14:47

Good points Doc, as always!

My main concern is....How do you, as a mineral owner on the Haynesville Shale,know when you are getting what is fair market? Is there a thing such as fair market in this environment? According to the buyers and sellers on some of these sites, at $27,000 per acre on Barnett,it is still speculative at best! Although it seems when you are a middle man there isn't much speculating as they seem to always find a buyer after they have taken all the risk and purchased your minerals sight unseen(minerals are in the ground,get it?) before they even had a buyer,unless they keep them for themselves ,in this play especially.

No one knows what it is worth! Big O & G are even speculative as to how high they are willing to go on upfront bonuses. I can hear the meetings now.."We will never pay $3,000 per acre of mineral rights again"....2 months later the Barnett Shale is discovered to now be viable for production. (Quote) "We will never pay $21,000 per acre for mineral rights again.Nothing will ever come close to touching the realm of the B/Shale".March 12,2007 (365 days before they had to release Haynesville info).It hasn't been a good decade for P/R in the oil and gas industry.

If we do not know what it is worth.....How in the world do you set a price to SELL ? Do you continue to bury your head up your....... in the sand,and trust Big O & G to set a fair price when they don't even know the value?

Big O & G guy's(landmen,leaders of the %age groups) , please do not take this too personally!! You will be the blunt end of this for years to come!We as commoners have no other outlet then to blame you! You are the ones that "volunteered" to stand in the gap and face big O & G for us so we wouldn't have too! You then fuss at us for not being informed because we feel you have taken advantage of us! We inform ourselves only to find out you have been in bed with Big O & G the whole time.You play golf with each other and laugh about how much money you are both makeing.(don't make me name names you bunch of clowns)

But I am certain you can come up with a price that both of you can live with,because what choice do they have after the ink is dry.

This is going to be harsh! I know no other way to say this though, as I am speaking to many of my friends and loved ones.A vast majority(not all just vast majority) of the people that are in deep debt ,enough to feel that they can at last climb out of the realms of the impoverished and financially challenged,will fall back into the same clutches as they were in prior to selling their rights.Probably even worse shape due to the cash from said sale being used to create even more debt.

I am not,I repeat not ,sitting on the high horse in judgment of anyone,for I was raised a PACB (Poor A_ _ Country Boy).If not for the due diligence of my "hottie" wife ,I so often speak of,I wouldn't have the proverbial "pot" to, you know what in.I say this from the heart! Do not sell the only chance to be financially stable that most of us will ever have!If you have a royalty check coming in every month,you can use that to help build credit,secure future loans,pay down debt and so forth.

Most of us will still have to get our sorry tails out of bed and go to work every day.After a couple of months worth of sick day call in's anyway! HA! HA! That "hottie" wife of mine said it wouldn't matter if we got 2 million dollars,I'd still have to work because we would only clear $1,000,000 after taxes.....HUH?.... We just might have to revisit that whole early retirement thing again! I may have gotten the short end of that stick!
I better go because 1/2 this is gonna get chopped off again tonight and I don't have another three hours to retype it.

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Permalink Reply by DrWAVeSport Cd1 on June 24, 2008 at 15:08

Snakestewart:

Bravo!!!

Remember: Five years down the road, natural gas may not be the most valuable mineral underneath your land! Who knows what new energy resource will be more profitable and usable in the future? Byproducts, water, shale, other mineral deposits, etc., etc., etc.

And, in 3-5 years, if your land/property has not been included in a drilling area, which is just about guaranteed (not enough drilling infrastructure built yet)....you CAN LEASE AGAIN! And, if this Haynesville Shale thing is the gold mine being portrayed by the BIG Boys (Snakestewart's credit)...YOU WILL BE LEASING FOR MORE $$$$!

Oh "well," You can lead a horse to water....

DrWAVeSport 6/24/2008

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Permalink Reply by Shaylon on June 24, 2008 at 13:49

There was no offer to lease. It was probably just a company fishing around, but the thing I wonder about, And if so, when can we expect to see any royalties from land leased in the middle of Shreveport? is such a small parcel of land going to pay much more than say 1000 dollars a year for say 10 years? If thats the amount we're talking, than I think selling might be the way to go.

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Permalink Reply by RAY on August 5, 2008 at 3:44

alot of folks are getting ants in the pants,getting worried about no contact from anybody,dont know what assoc. to join etccc.
just want to sell and get out of this madness......

the main thing thats stopping them.....how much to sell for??
therefore............dont sell !

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Permalink Reply by RAY on September 29, 2008 at 13:32

I F , someone was to sell one acre of mineral rights, whats a good asking price?

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Permalink Reply by Bobi Carr ("parker") on September 29, 2008 at 18:45

There was an individual on this site (who did not know it was against policy) who advertised his rights for sale. The property was in foreclosure. There are circumstances where it makes sense to sell. But as with any other decision, get informed before you make it.

There is NO right to rescind a sale of minerals for deficiency of price. PLAIN ENGLISH, if you make a bad decision - you will have to live with it. It is not like a Las Vegas marriage that can be annulled next week.

Make your decision, based on your circumstances with valid information from lots of sources that are not involved.

Your were doing fine before you heard of Haynesville Shale, take this time to educate yourself.

If on the other hand you are falling out of an airplane and headed for undoubted disaster, take the parachute. But remember that YOU are the only one who can evaluate your circumstances. Some circumstances are dire and others only look that way for a moment. If you haven't fallen out of the airplane, there is not much reason to pull the rip cord.

All of this is my humble opinion.

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Permalink Reply by George James on September 30, 2008 at 2:55

Depending on your situation, selling a portion of your mineral rights is sometimes a good hedge. Remember, just because you have leased your acreage, it does not mean you are going to get a phenomenal well every time.

Our family owns minerals all over the Barnett Shale. Most of the wells have come in great, but some have not. A couple of examples. Last fall EOG drilled a well on some of our land in Johnson County. The two offsetting wells IP'd at over 5MMcfde and continue to flow over 2MMcfde today. Our well hit a carst and was plugged and abandoned. Another similar situation in the same county - great offset wells and the operator's frac puncutured the Ellenburger formation, resulting in a gusher of a saltwater well....without any gas.

Their are a lot of variables to consider. Any savy investor knows that a balanced portfolio allocates no more than 15% in one sector.

Just some thoughts....but all that said, I've never sold any minerals but have considered selling some rockies assets due to the price differentials at the Rockies Hub.

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