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Question
My grandfather has been offered 6,500.00 for his rights on 8 acres in Logan County Oklahoma located in section 35, t17n, r4w.  I have been trying to do research to determine if this is a fair price.  I looked on the commission website and found that there are producing wells in the area.  But otherwise have no idea how to know if this offer is low or high.  Hoping you can help.  Thank you.

Answer
Depends a little as to what part of the section they are in and what the well spacing is there. There are several small wells in that section currently, but each covers only 1/4 of the entire section. The SE/4 of the section is the only part without a current well on it and there has been some leasing going on there recently that may involve the entire section (leaving out the formations that are already producing in other parts of the section.)

The buyer is probably hoping he'll sell and then they can go and lease them and get some of what they paid back in the form of a lease bonus. If it were me I'd call Schmidt Resources, Inc. (Google them...probably an Oklahoma company) and tell them of your grandfather's mineral rights and ask if they would like to lease them. They'd probably want to know which quarter section they were in as well so you might try and find that out prior to calling them.  

If they give you a lease offer, and it's more than $350/acre I'd go back to the company that wanted to buy them and tell them he'll sell for three times the amount they offered you to lease, or of course he could just decide to lease them, take the bonus, and retain ownership of the minerals and potentially be able to receive royalty payments later if they end up drilling a well. The $812.50/acre they are offering to buy them for now might be less than three times the going rate for leases in that area.

If he wants to sell them I'd suggest listing them for sale on my website (www.mineralhub.com) rather than selling them to the company that sent him unsolicited offer out of the blue. I'll make sure he gets a fair price for them. I bet they didn't tell him there was some current leasing going on there either.

If you have any questions you can contact me from the Mineral Hub website as well.

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

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 several articles which have appeared in various oil and gas 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 landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. 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.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

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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