Hunting property and mineral rights valuation

Hey everyone,

I'm interested in purchasing a hunting property in Coleman County, but it doesn't come with mineral rights. If it wasn't in an area with production... I'd be inclined to move forward. My main concern is buying the property and then having someone drill on it in the future without my control. Not intending to do anything with the mineral rights... just don't want anyone coming on the land and messing with my hunting!

I made an offer for $100/acre to the owner of the mineral rights, but the owner declined. Since it's a non-producing property... I'm having trouble figuring out what the value is before making another offer. Anyone have any idea how to value mineral rights? Is there someone I can talk to who specializes in mineral rights values on non-producing properties?

Thanks!

He’s probably not going to sell his mineral rights. I wouldn’t.

Lots of times the mineral rights are not for sale,, I think I"d ask the guy if he would sell and how much he wanted. Let that be the starting point. Last year I got paid $300 an acre for a lease in La.- Tuskalusa trend.- ( it was a 4 yr lease) ----------- I cant imagine taking less than $1000 an acre to sell the rights.

He's willing to sell the mineral rights, but won't give a price. Just wants me to "make an offer" - figured I'd try to find the fair market value before making the next offer...

There is production in Coleman County but doesn't seem to be much in the immediate area. There is no lease on the land. I assume if I was to move forward... even without a lease... he still has the right to lease it and have someone drill?

Many properties don't convey the mineral rights (value of what is in the ground). But, see if you can acquire the Surface rights. By my understanding that will give you some control and say over what actually comes onto the property.

"Is it for sale?" -------- answer --- make me an offer ------ translation,, no, its not for sale.

It will help on your end to find out the leasing history/production of the property and in the immediate area. Also are you sure that he owns the minerals and if so what percentage does he own?

Also if you can't get the minerals when he sells you the property see if he will waive his rights of ingress and egress, just to see what he says. Depending on the size of the property will help you with that.

Great feedback guys. I do know there was a lease on the property 20 years ago but none since then. The person selling it doesn't own the minerals, but the real estate agent put me in contact with the owner who does. The mineral rights owner had the property in the family since the 50s so it hasn't changed hands much.

Talk to a lawyer who is knowledgeable about mineral rights.

Already in contact with a lawyer. Was hoping to find someone to simply price the mineral rights

For what it's worth we bought a place several years ago that came with a very small portion of minerals. I want to say it was 0.75%. There were 3 wells covered by the mineral rights and our production checks were usually around $200 per month. With every check came a record of what the other rights owners received. The majority owner was getting around 6k per month. My point is that I would never buy a property that didn't come with some portion of the minerals and I doubt if anyone would sell their rights if there is production in the area.

I am willing to bet you will have to get closer to $1,000 an acre for the minerals if he pulled the make me an offer.

From what I can find online - there is production in Coleman County but only in the North and North West area. The area of the land I am looking at is in southern Coleman County. Makes finding the mineral rights pricing a bit of a challenge!

Don't forget the wind rights. There's wind farm activity in that area.

You could get lucky like us and have seismic lines run all across the property and they find nothing! Not lucky for our landowner but makes leasing easier with no competition!

Otherwise my buddies with land had the pads put on fences so it doesn't impact inside of the property.

from my understanding: We purchased our property in Mills, not far from Coleman, did not get all the mineral rights but a decent portion...WE did get all the executive rights (and 100% of wind rights) which, again from my understanding, allows us to control future production on our land (probably nothing there)....others who have their percentage of mineral rights cannot enter into a lease without our knowledge/permission.

Sounds like that you have the executive rights, which means you are the one who negotiates the lease and they just get a check.

Also ask your lawyer to advise you on other options in the land contract/resulting deed that either:

-designates a drilling site in one location of your property (maybe more depending on how big your tract is)-example: can only drill in the NW 5 acre postage stamp of your property. OR
-have the deed state that they can only drill under your property but not on the surface. example: they pool your acreage with a neighbor(s) and horizontally drill under yours. This may or may not be practical around Coleman, I don't know enough about the play there (maybe mostly gas like around Melvin, TX) to know if horizontal drilling is common.

I've done both of these in closings and they don't solve all of your problems but they help if he won't sell the minerals and you really want the land.

Coleman county isn't the Permian basin and shale play.

He would have to get a waiver of surface rights from the mineral owner which isn't the current surface owner. But the mineral owners might do that for cheaper than an outright purchase of the minerals.

You better understand that you have very little chance of buying property in this state with the mineral rights.

If you get them it will be in areas of poor production. Don't sweat it. Oil production is a temporary interruption that the deer adjust to.

Pay a landman to find out. It’s what they do for a living.

I bought a place about 4 years ago. Seller said he owned 10% and conveyed them all to me. Landman contacted me about a year after and wanted to lease. Said I owned 33.3% of the minerals and told me who else owned the other %s. Paid me $5000 for 3 years and never stepped foot on the property. Lease ended last year. Win win on my part.

Edit add : they drilled on the land next to mine and we were all “pooled” together. So if it would have hit, I would still got a percentage. I did however put some strong waivers in my lease. All property entrances had to have 16ft cattle guards. All access roads had to be county quality gravel. Irrigation quantity well must be drilled at my location of my choice and I sell water back to them. And a few other things I can’t recall without pulling up the agreement.

You need an appraisal performed by an MAI. They can value the rights and land. Go to the Apprasisalinstutue.org and find one.