Energy Industry (Oil & Gas)/Three years into a five-year lease

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Question
My sister and I have ten acres in Loving County Texas, NW/2S/4 of Section 2, Block 1, W & NW RR Co, survey. We have the mineral rights leased and are almost 3 years in a 5 year lease with no activity. As far as we know, there is no drilling activity and there has been no production.
We have been approached to sell the land for 3 thousand an acre and are seriously considering the offer, but would like to know if it is a reasonable offer. From what I see on the internet (mineral forums and such) worth is very subject to location. We would apreciate your opinion on this matter.

Answer
Anadarko, Chesapeake, Cimarex, Energen, and Shell Western all currently have permits to drill in your part of the county, so it's a pretty busy area actually. I suspect that your lease will be drilled before it expires if it's leased to one of these companies (or their representative.) $3000/acre may be a good offer, then again it may not be. Hard to tell without letting others have a crack at them if you are really wanting to sell.

As always, if you're considering selling, I would suggest posting them for sale on my website, the Mineral Hub (link below.) If you are seriously considering selling these, posting them for sale on the Mineral Hub will get you a lot of exposure to potential buyers.

We could price them at $3500/acre for instance, and see what happens. If someone offered that you'd be $500/acre ahead of your current offer. We could also price them as "make offer" but I think putting a price on them is a better idea as they'd attract more interest that way. Up to you, and I'm not pushing you to sell either. You might check the Texas Railroad Commission website to see if there's actually a drilling permit on your lease currently, or you could of course contact your lessee to see what their plans are, if any.

http://www.rrc.state.tx.us/index.php (Texas Railroad Commission link)

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub  

Energy Industry (Oil & Gas)

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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written articles of interest to mineral rights owners which have appeared in various industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and land and title work over the past ten years, and have also worked as a professional landman. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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