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Oil/Gas/evaluation of mineral rights

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Question
QUESTION: I want to transfer my mineral rights to my children. How do I value them?

ANSWER: Minerals have no value until there is leasing and/or exploration and production in the area.  If there is no production in the area the value of the right to the mineral would be in the range of $1.00 to $5.00 per acre.

If there is some leasing in the area then the value is based on the current bonus amount per acre.  In some areas this is ranges from a low of $15.00 acre up to $1,250 or more per acre.

If there is actual production in the area, say within about 1 mile of your mineral interest, then the value is based on approximately 36 months worth of the production.  

These are guidelines and nothing more.  The value is like a home...it is only worth what someone else will pay for it.

---------- FOLLOW-UP ----------

QUESTION: Who does the valuing so that it is acceptable for calculating taxes? what would the cost be of obtaining a value?

Answer
The only entity qualified to do this, if it is done, is the county in which the minerals are located.  You can call the tax assessor/appraiser in the county in which the minerals are located and ask them if they place a dollar value on the minerals.  

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Cliff Williams

Expertise

I will try to answer any question you have. Even if I reject a question, I still will give a shot at what I would do in your position. The only questions I will not take a shot at would be a highly technical engineering or geological question. I am beginning to see quite a few questions from land men and other oil companies and that doesn't matter to me either. I will attempt to help.

Experience

I am an oil and gas attorney that has been in the business for more than 20 years. I have held a series 22 and 63 securities license, been in oil and gas operations, land man, division order analyst all prior to obtaining my law degree. Today, I typically write title opinions verifying ownership of oil and gas minerals, assist landowners in negotiations on oil, gas and mineral leases, easements and conveyances. I also assist oil and gas companies with the sale of working interest ownership as well as common business law issues.

Organizations
State Bar of Texas, Member of the Tarrant County Bar and the Dallas County Bar Associations.

Publications
Multiple oil and gas topical columns on ezine.com.

Education/Credentials
I have a B.S. degree which I rely upon more than my Business Mgmt degree or Law degree...

Awards and Honors
Husband and father of 26 years

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