The mail today was rather interesting, it included two offers for purchasing minerals and one
for leasing mineral rights in different sections of the same township and range.

Normally, I don’t pay a lot of attention to the offers to purchase minerals in this township and
range. The mineral interests I own in this particular township and range have been in my family
since the original land patent was granted to settle a part of western Oklahoma and since my
great grandmother was business women enough to understand the value of land and minerals
when she continued to purchase property in 1945. But this time, there was something
different about the offers to purchase. The amount of the first offer was high enough that it
made me pause, the next offer was willing to beat any other that I received; that made me
think…maybe I should consider this opportunity.

Selling minerals is a highly personal and individual decision. But, there needs to be more than
just emotion driving the decision; and, it makes no difference if you are on the sell, or hold, side
of the transaction. As in this current case, where the surface of the original patented property
had been sold by family members many years before, the retained underlying minerals, now
partly mine, gave me the ability to hold on to my family history, something that meant a great
deal to me. Selling the minerals would cut that tie.

I also don’t think it is a good idea to completely remove emotion from the sell decision, that
final “gut check” has prevented many a bad deal from happening. But, now it was time to treat
these offers as any other and start doing some research and cash flow calculations.
Since I don’t live close to where the subject minerals are located, I started my research by
looking at the prior exploration and development history on, and surrounding, the minerals
owned. I also considered the newer exploration and drilling technologies that have been
created and the effect they would have on that history. I then considered any prior, or current,
production activity and the current development and leasing activity in the general area of
interest. I needed to be as informed as the people sending me the offers.

Once I felt comfortable about knowing what was happening, in an oil and gas sense, around my
minerals township and range, I created a cash forecast that would show me the cash flow, as
best I could envision, based upon my estimates of what the sale would look like, if made, or if
not made. This process included taking into consideration income taxes and the price of oil and
gas to be received over a period of years, discounting the results back to a current value to be
compared with the offers received. Sounds like a lot of work, and it is, but this part of the sell,

or hold, decision, although it can be, and is, rationalized by many mineral owners, should not be
left to rationalization. Do the necessary work, so that in the future, you’ll be less likely to be
upset by your sell, or hold, decision.

My final step in the sell, or hold, decision was to review my personal economic status and
things I had planned for the future. Why? Perhaps the sale of minerals would allow debt to be
paid off early, or put something away for retirement, or provide for a grandchild’s college
education; this list can go on, and, on. But, if those type things are already covered, how is the
cash from the sale going to be of better benefit than retaining the minerals?

The point of all this discussion…everyone has unique circumstances and unique factual
situations to consider before deciding to sell, or hold, minerals. Make sure you take the time to
consider all the possibilities before signing away your minerals.

As for me, while the offers were tempting, I think I’ll hold on to my leasehold minerals just a
little while longer.