Well crud! Thought I had sold the place.

[ChrisB]

I don't ever remember hearing mineral rights discussed in land deals around here and I've always wondered how that worked. Could someone please describe what rights each party would have if say I own the land and you own the mineral rights?

Can you decide at anytime to put a well in or mine it? How about location of these on the property?

Thanks,
Chris

 

[Lammie]

Well, she countered. She wants to give us till the end of the month, and she wants 51% of the mineral rights. I called the realtor and told him no.

I really hate this stuff. I have never been good at these kinds of things. I can only go with my gut feeling. And since my husband is out of touch till tonight, I am making the decisions right now unassisted.

I have set up an appointment to look at properties this weekend but I think I may have ended the negotiations.

I miss the time when no one ever even thought about mineral rights around here. You just sold the place and it was done. This gas thing has changed everything.

 

[3MR]

I wouldnt call it a done deal. Stand your ground on the mineral rights. I imagine they are going to counter again with an offer that doesnt have the 51% mineral rights. You did the right thing regardless.

PS: Besides, you really want to give them to me as a gift dont you. 8) I couldnt possibly accept more than 25% though. 8)

 

[Gate Opener]

Hold on to your guns girl. That lady is seeing $ signs with those minerals and is going to try and try. Tell the realtor to quit talking to you about it. Solid NO. He needs to tell the other realtor that he can't even bring it up to you then the lady might get the drift. Otherwise she will be wanting 40%, 30% etc. You give her any minerals she has say so about what can be done on the place and might hinder you getting a well. You would have to have her approval.

Don't feel pressured. If she doesn't buy it someone will and it may be at a time when you are ready. If you are close to Dallas and the growth is coming your way-shoot don't even worry. You might even get more money later-who knows?

 

[Herefords.US]

You can pretty much count on $800 per month, per acre on the Barnett Shale if you use a good company.

All I've got to say is that I SURE hope that your math is correct, backhoeboogie!

And...hang on to those mineral rights, Lammie!

George

 

[Lammie]

You can pretty much count on $800 per month, per acre on the Barnett Shale if you use a good company.

All I've got to say is that I SURE hope that your math is correct, backhoeboogie!

And...hang on to those mineral rights, Lammie!

George

There is a LOT of newly rich people around here. People who would never otherwise have had that sort of wealth. I know a guy that's getting over 20k from 9 pools on a 38 acre pasture he bought on a whim 10 years ago.

I won't ever see that, but if I can get a little extra income out of it, it is worth the fight.

 

[backhoeboogie]

All I've got to say is that I SURE hope that your math is correct, backhoeboogie!

And...hang on to those mineral rights, Lammie!

George

There is a LOT of newly rich people around here. People who would never otherwise have had that sort of wealth. I know a guy that's getting over 20k from 9 pools on a 38 acre pasture he bought on a whim 10 years ago.

I won't ever see that, but if I can get a little extra income out of it, it is worth the fight.

George, It is not my math. It comes right of a royalty estimator program that you can download off of the internet. I would be glad to share it with anyone. You need to know how much mineral rights you have (e.g. 50% or 100%), the acreage, the amount of wells, the size you are pooled in, and the spot price of gas. It will calculate your royalty for you. I know many getting over $1,000 an acre per month but that will trend down.

What Lammie is telling you above is fact. There are a whole bunch of old "cedar hackers and fence menders" making lots of nickels right now. It is kind of like the old saying about "He who laughs last". I like seeing these old timers living in comfort. Feels good. Most of them were good hard working people all their lives.

 

[Earl Thigpen]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order.

This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

 

[Gate Opener]

You are correct that there aren't any guarantees that a person will get rich. Good possibility with the activity around there though.

There is the guarantee that if she sells with minerals included she will definitely not get rich.

 

[Herefords.US]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order.

This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

Lots of speculation here...and certainly lots of folks already getting nice paychecks in the counties just east of us. Our area is just getting started.

But I'm definitely happy with the lease bonus money that we've received the past three years (single year negotiated leases). That alone amounts to between 6 and 7 times what my parents originally paid for the place back in 1962-63 - but I WOULD like to see them start drilling because we(our family) have 100% of the royalty on most of it. Even if backhoeboogie has miscalculated by a couple of decimal places, I'd still be a happy camper!

George

 

[Lammie]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order.

This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

Not a lot, sir. I am hobby deluxe. Well, I don't own a hat and my boots are really dirty.

I look at it this way. If I don't sell the house, that's okay. I have a place to live. We aren't in a position where we have to sell it. We are selling out of choice. I realize that we need to be closer to where my husband works. My potential buyer, on the other hand, has sold her house and is in the position where she needs to get out. She wants this house, and I figure that puts me in a position in which I can either get what I want or she can move on, in which case I still have a place to live.

No, I don't have the kind of land that will make me rich off the mineral rights. But I would prefer to keep them all the same.

 

[Cabo]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order.

This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

Not a lot, sir. I am hobby deluxe. Well, I don't own a hat and my boots are really dirty.

I look at it this way. If I don't sell the house, that's okay. I have a place to live. We aren't in a position where we have to sell it. We are selling out of choice. I realize that we need to be closer to where my husband works. My potential buyer, on the other hand, has sold her house and is in the position where she needs to get out. She wants this house, and I figure that puts me in a position in which I can either get what I want or she can move on, in which case I still have a place to live.

No, I don't have the kind of land that will make me rich off the mineral rights. But I would prefer to keep them all the same.

Careful there Lammie, a lot of folks on the "Sitting on hay" thread will get you for wanting to get a decent price for it even though your potential buyer didn't use much forethought in getting into her jam.

 

[Lammie]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty. The producer drills a well and hits gas. Price of gas is selling today for around $7.00/mcf and your well is producing 10,000 mcf per month. Your share would come to 20% of $70,000/month PROVIDED the boundaries of the well (the block) are completly containd within YOUR property. But suppose the 100 acre block is divided 80% on your land and 20% on your neighbors land. You would then get 80% of the 20% royalty and your neighbor would get 20% of the 20% royalty. The legal document describing how much you get is called a division order.

This, of course, depends IF they want to drill and IF they have your land leased. Most of the US has now been recorded in 3D seismic and some in 4D seismic (what ever that means). They have a pretty good idea what's under your land and there is a good to excellent chance your land will NEVER be leased because there is nothing of interest under it. And if its not leased thay can't (or won't) drill on it.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

Not a lot, sir. I am hobby deluxe. Well, I don't own a hat and my boots are really dirty.

I look at it this way. If I don't sell the house, that's okay. I have a place to live. We aren't in a position where we have to sell it. We are selling out of choice. I realize that we need to be closer to where my husband works. My potential buyer, on the other hand, has sold her house and is in the position where she needs to get out. She wants this house, and I figure that puts me in a position in which I can either get what I want or she can move on, in which case I still have a place to live.

No, I don't have the kind of land that will make me rich off the mineral rights. But I would prefer to keep them all the same.

Careful there Lammie, a lot of folks on the "Sitting on hay" thread will get you for wanting to get a decent price for it even though your potential buyer didn't use much forethought in getting into her jam.

I haven't looked at that thread lately. I have found someone who will sell me the hay I need, though, at a reasonable cost. I just don't know where it is going to go right at the moment. I may not have a place to live!

 

[backhoeboogie]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

Two things here you should be aware of. The lease "chum" money your are citing at $250 an acres is more like $2500 an acre. The royalty is 25% or I don't sign. The average well production on Barnette is 2000 to 5000 mcf PER DAY for this area.

You are right about everything else. Absolutely.

The big thing is to drill multiple wells parallel which does a much better fracturing job.

Say you just have 10 acres in a 640 acre pool at the minimum of 2000 mcf per day times 6 wells, at $7 per mcf is $9,980 per month. Do the math yourself or have a computer program do it. For 20 acres you can double the royalty. etc.

If Lammie is only setting on 5 acres, she is setting pretty. It is none of my business how much real estate we are talking. She is not in production yet but it is coming. I don't know how thick the seam is at her locale either.

 

[backhoeboogie]

I still have 16 acres that I have not leased yet. The petro landmen will not leave me alone. I bought the land for less than $1K an acre years back and I am being offered $17K an acre to sell the mineral rights to it.

I am being offered $2500 an acre chum money to sign the lease with a 22% royalty. I won't sign for less than 25% and that is why it is not leased.

 

[3MR]

I get a regular offer from the oil companies wanting to buy my mineral rights to a piece of property. I just ignore the letters and the offer keeps going up. I have no intention of selling them though.

 

[backhoeboogie]

I get a regular offer from the oil companies wanting to buy my mineral rights to a piece of property. I just ignore the letters and the offer keeps going up. I have no intention of selling them though.

There are a lot of people crying right now that signed for less than $1K an acre and at less than 20%. Got a cousin in Cresson that signed on 1/8 royalty. The smallest royalty check he has received is just over $20K one month. If he had signed on 1/4, his royalty would be doubled.

There are lots of kids who sold the family farm with minerals and they are crying as well.

DON'T sell minerals. I sold land with minerals years back and I totally regret it.

 

[Earl Thigpen]

Folks, I don't have any idea what you're talking about. Royalties come from a negotiated percentage you do with the producer. When the land is leased for a bonus and so much per acre thereafter you put into the contract how much royalty you feel you are intittled to. Let's say you negotiate 20% royalty.

So owning the mineral rights is not an automatic guarantee you're gonna be rich. And leasing your land for $250/acre bonus and $50/acre each year thereafter isn't gonna make you wealthy either unless you got a couple hundred thousand acres in which case you could care less about a measly $250/acre.

So, Lammie. How many acres are you selling?

Two things here you should be aware of. The lease "chum" money your are citing at $250 an acres is more like $2500 an acre. The royalty is 25% or I don't sign. The average well production on Barnette is 2000 to 5000 mcf PER DAY for this area.

You are right about everything else. Absolutely.

The big thing is to drill multiple wells parallel which does a much better fracturing job.

Say you just have 10 acres in a 640 acre pool at the minimum of 2000 mcf per day times 6 wells, at $7 per mcf is $9,980 per month. Do the math yourself or have a computer program do it. For 20 acres you can double the royalty. etc.

If Lammie is only setting on 5 acres, she is setting pretty. It is none of my business how much real estate we are talking. She is not in production yet but it is coming. I don't know how thick the seam is at her locale either.

Numbers I'm using are real numbers. I don't know anyone around my part of Texas getting $2500.00 bonus/acre for a lease. Sure wished I could get that for my place. Have me a new hay barn in a heart beat :lol: In fact, the highest lease bonus I've heard of was $500/acre and that was my neighbor across the road and it was on a piece of land that had proven reserves all around it. And it was a one year lease (drilling lease) He's knocking back around $100K/month now but again, ALL of the block is contained in his land. He's not sharing with anyone.

In your example the six wells producing 2000mcf each/day at $7.00/mcf comes out to $84,000.00/day. If the negotiated royalty was 20% then the land owners share would be $16,800/day provided the block was contained in his property. But if the production was shared by someone and for purposes of argument lets say a 90-10 split then the majority owner would receive $15,120.00/day (90% of the 20%) and the minority owner would receive $1680.00/day (10% of the 20%).

Don't get me wrong. I would not turn down $1680/day. And there are some wells out there that produce that much (some a lot more). I was just tryin to point out to Lammie that if they only had a couple of acres and playing the odds that IF anyone ever leased the land and IF anyone ever drilled and IF something was struck .... A lot of if's and a small piece of land. Might be better to negotiate a fair price for the minerals when the land is sold. Just something to think about.

By the way, thanks for the tip on the bonus. I've got about 150 acres that are up for lease. I think I'll ask for $2500.00 bonus and see what happens. Hey, can't hurt. (man, that's $375,000 whoa, thats one heII of a barn, maybe a new air conditioned tractor too.) :shock:

 

[backhoeboogie]

This is an old write out of the newspaper. The price of poker has gone up since then. See for yourself. Barnette Shale is a sure thing, unless they frac too deep and get into salt water.

Edit: trying to get to the photo link and having trouble. Maybe this will work. Sorry for so much trouble folks. Not trying to jerk anyone's chain on this, just trying to help. You all do whatever you want.

http://cattletoday.com/photos/showphoto ... puser=3162

 

[ffamom]

We have about 2 acres. Since we are in the middle of town, we only received $2000 for a signing bonus. The man behind us has 50 acres. He got a ton of money for the signing bonus since he held all the cards. He has the number of acres needed and the distance from homes for the company to drill. The wells will be on his land and they will directionally bore under everyone elses property. I can't wait for the drilling to begin. To us, it is like ...finding money on the ground. Thank goodness no one kept mineral rights 10 years ago when we build our house.