Selling Mineral Rights In Amite County Mississippi

Mostly through inheritance, many people own mineral rights in Amite County, Mississippi. A lot of people are surprised to learn that they own the mineral rights or "oil rights" when an oil company landman gives the a call to secure an oil and gas lease. Nice surprise!

Certain tracts of land in that part of Wilkinson County, Amite County and southwest Pike County right along the Louisiana line might be prospective for oil and gas exploration. It is part of an oil 'play' called the Tuscaloosa Marine Shale or "TMS" for short. The TMS is a geologic formation that is known to contain oil but as of yet, has not proven itself to be widely commercial. "Commercial" meaning it makes a profit for the oil company drilling wells in that area.

The TMS has seen dozens of wells drilled over the past couple of decades. Some production was found and in a few places, it's pretty good, as far as oil wells go. In a lot of places, it's not good. Drilling has identified an area that will produce oil, it's just a matter of can the oil companies do it and make a profit. So far, they have tucked their tails between their legs and ran away!

But one company from Australia is willing to take another shot at it. The company is called Australis Oil & Gas Limited and they have formed a subsidiary to try the TMS called Australis TMS Inc. The company bought the oil leases owned by Encana Corporation, one of the companies that gave up.

Another company which has already tried many times in the TMS by drilling deep, expensive wells after securing oil leases from mineral rights owners is Goodrich Oil. They still hold quite a leasehold in the play. Here's to hope that Australis or Goodrich (or somebody!) can figure it out.

If you own mineral rights in southern Amite County (oil rights) or southeast Wilkinson County along the Louisiana line and don't wish to wait any longer for something great to happen in the TMS, you can also sell mineral rights and enjoy sure-thing cash. In some instances, it does not matter if your tract is leased or not. You may be able to sell either way. There is no way to know if the TMS will work out or not, so, for many, it's a great way to enjoy a big cash payday. Or, you can also sell, say, half of your oil rights and gamble with the other half that the TMS turns out good!

To find out if selling mineral rights in Amite County or selling mineral rights in Wilkinson County is an option for you, contact me through the form at the Upper Right section of this page or give me a call and I'll be glad to discuss it with you. Phone number is 318-426-0909.

Good luck to all!

What Is The 'Going Rate" To Lease Or Sell Mineral Rights?

Regarding leasing mineral rights for an oil and gas lease or selling mineral rights, it is human nature to ask 'What is the going rate in my area?' And the answer is 'whatever you can get.' Not trying to be flippant but relying on a 'going rate' can cost you a fortune. Only luck and fate are really in control. Just because somebody near you got a certain amount per acre doesn't mean you will. There are many factors that come into play. It might even be that you can't get an offer for your mineral rights. Again, each tract has its own certain set of circumstances. I have seen people get an offer, a good offer, and hold out because somebody nearby got more and end up getting nothing because the offer disappeared. The oil business is very fickle, be careful of falling into this trap. And in certain states, such as Texas and others, the mineral owner can effectively get 'cut out' of enjoying royalties for a long time and sometimes forever. It's impossible to cover all situations one might run across. Sometimes, a mineral owner lucks out by holding out for more; just remember than any offer must be carefully considered because it might be the last. There is no rule or law governing what one might get for an oil and gas lease or to sell mineral rights. It's just a free market, so, we are back to the answer being 'whatever you can get!' And, in fact, unlike real estate, prices paid for an oil and gas lease or an amount paid to sell mineral rights is not public information. In certain states, the amount paid for state leases is tracked but that does not mean one can get that same amount for his tract. I wish it were more definitive, but it's not!

In areas with a lot of competition for an oil and gas lease from different oil companies, a rate range is sometimes discernible but it varies widely! Nothing is certain in oil and gas. Also, the smaller the tract, the less leverage one has. It's a huge challenge and impossible to 'know' what is best to do. But try not to fall into the trap of relying on any 'going rate.' As for selling mineral rights, same thing applies, each tract is different and a buyer is going to analyze it with many factors in mind to assess the mineral rights value. With all of this in mind, it's best to consult an expert, someone with many years of experience, regarding value. Good luck!

P.S. Lastly, a 'signing bonus,' a 'lease bonus,' is only one factor to consider. There are other important parts to an oil and gas lease other than the amount paid to sign. If you are not experienced in oil and gas matters, hire a pro!

Oil Company Cheating Me Out Of Money!

This is amazing and a caution for those who own mineral rights. Not once, but THREE times last week, I discovered that an oil company operator is either not paying me right or not paying me at all! I have many properties all over the USA which I have accumulated over a long period of time. Here are the stories.

Story 1 -- A lady called me and wanted to buy her mineral rights in Colorado. We came to an agreement and I bought her out. I sent the paperwork to the operator (a very large global company), and they began paying me. No problems. Then, months later, the brother decided he wanted to sell. We made a deal, I bought him out and sent the operator the papers. But this time, it had changed hands and was owned by a small operator. After about three months, it dawned on me that I was not receiving royalties for the brother's part. I notified them and found out that they had been continuing to send the royalties to the brother! He didn't tell me and they didn't either. If I had not caught it, they would STILL be sending him the checks. I showed them copies of my letter from months ago. Oops, she said, okay, we'll start paying you. I said, Fine, but you have to pay me my back royalties, too, you made the mistake! She said, Well, we can't pay you for what somebody else has already received. I said Au Contrare! Yes, you can and yes, you will, that's MY money! Just because your company goofed up is not my concern! So, now we have a battle going on. I'll get the money.

Story 2 -- Similar situation. Somebody in Texas wanted me to buy them out. I did so, sent the papers to the operator. That was months ago. This past week, another member of the seller's family notified me that he had received his first check. I told him I had not even received a division order! So, I notified the company, another huge company. Oops, the landman said, I guess we made a mistake and missed that deed. So, they had sent a division order and check to the previous owner!

Story 3 -- About five years ago, I bought an interest in Louisiana. About three years ago, they drilled the tract and I have been receiving royalties ever since. Now, the operator notifies me that they had missed a deed where I sold part of my interest. (I sent them copies way back when.) So, all of this time, they have been overpaying me. Reason I didn't catch it is because the title on that deal is a can of worms, it's complicated. But it's simple for them to simply transfer a portion of whatever I owned to the man I sold part of my interest to. But, they missed it. I own a lot of properties, it's hard to keep up with all of this! But, I do try to monitor things. Bottom line is they are going to have to deduct years of royalties from my account because I want them to pay my grantee what he is owed and make him whole. Good news is they agreed to do so.

So, lesson learned is that one has to be careful! As for me, just more proof that managing producing minerals is a never-ending battle to be paid correctly!

What Is A Non-Participating Royalty Interest (NPRI)?

The oil and gas business is certainly a challenge! It's a very complex business. For mineral owners, it's quite daunting to understand mineral rights, especially, since many mineral rights owners inherited their rights and really do not know what they have. Daddy or Grandpa might have bought something 50 years ago, then passed and didn't really keep ideal records. This is quite common! So, say you found some papers and you know it has something to do with mineral rights. What, exactly, do you have?

Do you find a reference to a non-participating royalty interest? For short, it may be called NPRI. A non-participating royalty interest is the right to receive oil royalties or gas royalties, pure and simple. It does not include some rights that a mineral rights owner enjoys. Such as, the right to explore for oil and gas. (This is moot unless you are Bill Gates, as oil and gas wells cost a small fortune to drill.) More apropos, a mineral rights owner has the right to lease the lands to an oil and gas company (grant an oil & gas lease) and let the oil company (who has big bucks) drill and explore. And, if a mineral rights owner did, in fact, own the royalty rights, the oil or gas company will pay him royalty if a well hits. Lastly, a mineral owner enjoys the rights to a lease bonus (lease signing bonus) and annual rentals (rentals are uncommon these days). So, a non-participating royalty interest is just basically the right to receive oil checks or gas checks (royalties). Almost all sales of mineral rights these days are just that but in decades past, sometimes an NPRI was carved out of the mineral rights.

Perhaps you have discovered that you inherited an NPRI. Maybe some day you will be contacted by an oil company saying that they have drilled a well and they wish for you to ratify an oil & gas lease that the mineral rights owner has signed. The document is called just that -- ratification. This is quite common. Once you ratify and are put in "pay" status, you can then enjoy royalty checks when oil/gas production occurs. Hopefully, the oil or gas company will hit something good and you'll get regular checks. If for any reason you wish to sell these rights, it is possible to do so. Here is more info about the non-participating royalty interest (NPRI), or just contact me for help.

Oil & Gas Operators Deducting Too Many Fees

Oil and gas exploration entered a new era in 2008 with the announcement of the discovery of the Haynesville shale play in Louisiana (and later Texas). The Barnett shale, Fayetteville shale and other shale plays had seen some development before that but the Haynesville broke it wide open.

This post is about deductions from royalty checks to the mineral owners. Prior to 2008, in my opinion, all was pretty much well. Operators did not make many deductions to oil and gas royalty checks. We are primarily talking about deductions pertinent to natural gas, not crude oil or condensate. The problem for royalty owners has surfaced in the past few years. The two worst companies operating in the Haynesville shale which I have seen are Chesapeake and Samson. Wow, they are socking it to the royalty owners. Instead of a few percent, I've seen it as high as 33%. Say your check's gross amount due you is $1,000; they deduct up to $330 for fees. And often, exactly what these fees are is impossible to determine. This isn't right. Some operators don't even show deductions at all, they just pay the royalty owner a lower price for each unit of natural gas. Something should be done about this. And, in fact, something is being done about it in some cases, as numerous lawsuits have occurred. What a shame. The governing authorities should step in here and protect royalty owners. But, who knows if that will ever happen. And, in some states, a class action lawsuit, where a lot of mineral/royalty owners could band together in a class action, it just isn't possible due to the way the laws are in that state. I hope things will improve.

I have had people contact me wishing to sell their mineral and royalty rights because it's just not worth dealing with it due to excessive deductions and fees reducing their royalty check amount. These regular oil and gas checks sure come in handy for people but you sure hate to be "taken." I understand their thinking and regret that operators put people in this position. And as I said, this only started happening in the past few years. For anyone thinking along these lines (about selling royalties), here is more info: selling mineral rights.

Sell Mineral Rights In Tuscaloosa Shale Play

If you have any interest in selling all or part of your mineral rights and royalty rights, and own property in the following Louisiana parishes or Mississippi counties, contact this mineral rights buyer site -- Payday Minerals, LLC. They speculate in various parts of the USA, including Central Louisiana and South Mississippi. Tuscaloosa shale play buy area: Louisiana parishes -- West Feliciana parish, East Feliciana parish, St. Helena parish. Mississippi counties -- Wilkinson county, Amite county. The area may expand or contract at any time.

Why Sell Mineral Rights

Many mineral rights owners face the question: Why sell mineral rights? Should you? Or not? This question has come up a lot in the past couple of years with the announce of another shale play. Here are a couple of important shale plays:

• Eagle Ford shale play
• Haynesville shale play

The Eagle Ford shale is in south Texas, in a broad area from Gonzales county to Webb county. A couple of years ago, Petrohawk brought it to the newsfront with announcement that drilling had paid off there and they were enthused about it. Since then, much oil and gas leasing activity has occurred and more drilling, as well. It appears that production is not as strong as in the Haynesville shale, but, it's still good. Here is more info: Eagle Ford shale.

And that means that mineral rights owners now face the first question listed above. Because any time an oil play or gas play is announced, mineral rights sales can bring big money.

There are many reasons one might want to sell all or part. But the main reason it's prudent to consider it is that cash money is a sure thing. And oil and gas exploration is anything but that. Over my 32 years in the oil and gas business, countless times, I have seen people reject an offer to sell that would have done them good, even made some wealthy, and then something went wrong and the offer went away. And they couldn't get much at all after that. Sometimes, zero. And that's pretty sad! I have seen people turn down million dollar paydays and a week later, they couldn't get a penny for the same property. Oil and gas is a fickle business and things change rapidly!

The Haynesville shale play (see Haynesville shale map) is one such play. Wow, a lot of good stories and sad stories, too! Some people got fortunes and some people lost them!

So, if you own mineral rights (which include royalty rights), it's wise to consider it. Follow the links on this page for more info.

Value Of Mineral Rights

There are many factors in a mineral rights valuation. There is no simple answer. For purposes of this blog, we will deal only with the value of oil and gas. If you have coal in your area, that's a another subject.

As for oil and gas, are your mineral rights in a region where oil and gas production has been found? If not, the value of your minerals is not very much at all. If you're minerals are in an oil or gas producing region, it could be substantial. In some areas where there is a shale play going on, you could reap a large payday, indeed. Mineral rights buyers such as Payday Minerals have paid out millions of dollars to some lucky mineral owners.

Another factor is whether you have an existing oil and gas lease on your property. And, if you are already receiving a royalty production check, that can affect value, in either direction. It's quite a complicated formula but the good news is that mineral owner doesn't have to figure it out. Here is one explanation of how to sell minerals.

Mineral rights buyers are gamblers. Oil and gas exploration is a very risky business and it's quite a roller coaster ride. If the price of crude oil and/or natural gas goes down, the income or potential income from mineral rights will go down, as well. So, other than cash, nothing is a sure thing. Companies who assemble a mineral rights or a royalties portfolio spread their risk by buying thousands of acres across many tracts. This way, if one goes bad, it doesn't hurt them so much.

And again, if your mineral rights are in one of the shale plays, such as the Haynesville shale, Eagle Ford shale, Colony Granite Wash, Niobrara shale, Marcellus shale, Fayetteville shale or Bakken shale, your minerals could be worth a small fortune, or a large fortune, depending on how many acres you have.

In future posts, other aspects will be covered. There is quite a lot to it!