I work for a university, and through a series of events, we
are the recipients of some mineral rights in Oklahoma.
Though the rights are non-producing, there is a land man
interested in leasing the rights.
My question has to do with how I value the asset. Our
regulations say we should book it for the "fair market
value" of the rights, essentially how much we could sell
them for.
Short of having an appraisal done, is there a way to
determine this? I've come across a few sources saying a
rule of thumb is anything from 2.5 to 4 (usually suggested
at 3) times the negotiated bonus.
Thanks.
Answer Dear Tony--
Short of having an appraisal done, is there a way to?------ No, basically because you have no sense of the "market", but if itis just a few acres, it probably makes no real difference.
There is a reason why it is non-producing. Why is it worth more than zero? because one wants to lease it?
So, if it is not much land, just go by these rules of thumb.
If you want to, contact me at my web site ACLCEnergy.com--we can talk.
