Real Property Appraisals/Marketability of mineral and oil deeds
QUESTION: I inherited sub surface real estate rights which consist, separately, of a mineral deed and an oil/natural gas deed. With the oil industry these days and inherent risk involved in exploration, it's been recommended I pursue the mineral lease in hopes the operator hits oil and I get an automatic override on oil and gas production. In other words, focus my venture strictly on mineral extraction and cross my fingers for oil.
My question - what all can I do with my mineral rights? They cover a 8,100 acre parcel, located in Tyrrell, NC. Technically two parcels separated by a river. We have riparian rights.
My main train of thought is to build a rock quarry and reap the benefits of any other minerals or oil/gas unearthed along the way.
Also, what studies/surveys can I perform to test the mineral content of the land? A colleague explained the 3D seismic process for testing for oil - do I need to perform 3D seismic to survey mineral content?
Any tips on marketing these rights would be greatly appreciated. I can provide copies of the deeds and maps upon request. Thanks!
ANSWER: Joseph, sounds like you inherited an excellent property, congratulations.
Unfortunately, I do not specialize in mineral rights valuation.
In my mind, you are going to have to locate an expert, possibly two or more experts who can analyze what you have and do the studies/surveys themselves.
You need to examine what appraisers call the "Highest and Best Use" of this property - which is going to involve a very complex analysis of oil and gas production, riparian rights, mining, and possibly conservation issues.
I guess I would first find an attorney with this expertise. They probably would have contact with the other experts you will need to hire to help you determine how to proceed with development of this property.
Good luck and have fun, this sounds like a several year process.
John C. Carlson
Victorville & Diamond Bar, ca
---------- FOLLOW-UP ----------
Thank you for your reply. My grandfather purchased this land in the 1960s and was offered quite a large sum after Sonocy Mobil Oil Company (before ExxonMobil merger) performed some tests and discovered oil, natural gas, and other minerals. Unfortunately the deal fell through because one of the other owners of the interest passed away and his estate was frozen until it was passed to his heirs.
I've had trouble finding an expert who can perform an analysis of the property. I'm not even sure where to start.
Are there any companies you know of that perform these services? I'm by no means asking you to endorse any company in particular, rarher, to find a starting point.
You could start by going to the American Society of Appraisers website. Go to the "find an appraiser" page. In the middle of the page is a "Appraisal Expertise" or "Discipline" box.
There are several drop down boxes & you should go thru them independently looking for the discipline you need. This will give you a list of appraisers with that expertise.
Problem is, you have multiple issues to explore: Mines & quarries, oil, riparian rights, the whole "ball of wax" as they say. Since you have so many acres, I would also think you should contact several conservation groups like the Property and Environmental Research Center in Bozeman, MT. I subscribe to their quarterly "PERC Reports" magazine. They might help you with the riparian rights issue. They also might help you find out how best to use the stream to your advantage. In their current, Winter Issue there is an article about helping private land owners with offering hunting & fishing - for a fee, for instance, on your land.
You could also set up a Conservation Easement and obtain a tax deduction for it. This is very complicated and needs legal representation.
You have so many aspects of this land, I would make a list of all the features, mining, oil, riparian rights & start Googling them one by one looking for information sources. I imagine you're going to have to make dozens of calls to line up experts to help you.
I truly think that you are going to have to have strong legal representation to help you protect your property rights. You probably are going to be dealing with State & Federal Agencies with regard to the land uses & you need to have legal help to venture thru the State & Federal Regulation minefields.
Best of luck to you, I wish I could help with this project, it sounds fascinating. Keep in touch & let me know your progress.
If I've been helpful to you, I would appreciate it if you would give me an excellent rating and write a short testimonial.
John C. Carlson
Victorville & Diamond Bar, CA