Oil and Gas Mineral Values Today

In an effort to get offers on some acreage, a mineral broker recently sent out a mass email with the Subject line – “Is anybody out there buying minerals anymore?” My how times change, and change fast! Year 2014 seems like years ago, not just last year. Almost every mineral parcel we marketed was sold promptly back in those days! But, not now, not in 2015.

If you started reading the earliest articles posted on this website (starts at the bottom of the web page), you will read our boom time warnings. Having lived through a handful of oil and gas price cycles, we warned the owners of newly valued minerals that all those media articles quoting market analysts predicting oil going up, up, up, might be wrong, and that the economic cycle of commodity prices almost always overrules fear driven speculation about a world oil or natural gas shortage. We challenged the philosophy that you never sell your minerals, because some owners that have financial need might be wise to take a little money off the table by selling a portion of their highly priced minerals…..while they were highly priced……and while somebody wanted them….. in order to pay down debt or children’s college tuition expenses.

Today, we have good news for some, and bad news for others that are considering selling some portion of their oil and gas mineral rights. For those of you that are receiving unsolicited purchase offers, you are most likely in somewhat of a proven area geologically. And if you are in the core or central area within a geological play, you should receive prices that are roughly equal or even higher than what you were offered in 2014. Caple Royalty Services can guide you through the process of deciding what to sell, and then we can help you maximize your sales proceeds. Check out our client comments if you need somebody else’s opinion!

Now, here is the bad news. If you are not getting any offers, like you were a year ago, it is likely you are on the periphery of a geologic play, in an area that is not proven to be economically feasible for horizontal drilling exploration at today’s oil and natural gas prices. Your lease may be expiring, and you hope to lease it again, but many mineral owners are realizing recently that nobody wants to buy their lease, or their minerals. Their minerals are not worthless, but they aren’t much help financially during times like this. If you find a buyer, even with our assistance, they will offer you a small fraction of your minerals’ value back in early 2014.

The hopeful news is that the cycle works both ways, up and down. While we don’t know whether prices will remain depressed for six months or five years, it is likely that mineral prices will eventually regain their previous value, but it is not guaranteed. If you are trying to make some decisions about your mineral rights, let Caple Royalty Services help you consider your options in a FREE CONSULTATION.