Tom Sikes's blog

Why Does My Conveyance Say Ten Dollars Instead of the Sale Price?

Royalty and mineral interests are a form of real estate.  There are two ways to transfer real estate from one party to another, by gift or by sale.  In order for a sale to be valid, something of value must be exchanged for the property.  This is something of value is known as consideration, and in our case is whatever it is we are paying you for the property.

The first paragraph of our Conveyance states:  "in consideration of the sum of Ten and more dollars ($10.00) cash in hand paid and other good and valuable consideration."

Value Determination

The absolute best way to determine value would be to engage an oil and gas engineering firm to calculate a market value based on assumptions about future production and product prices.  These firms are mostly located in the cities you would think of as being in oil and gas country. Houston, Dallas, Tulsa, etc.

One could also get an offer or offers from the company operating the lease, from a royalty buyer such as TAS Royalty Company, or from an independent investor or investor group.

Please give me a call if you would like to discuss this further. 

 

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