Buyer Tactics: Offers for Minerals You Don’t Own

Here’s the truth: if one company wants to buy your minerals, there’s a very good chance other companies do as well. But many companies don’t want you shopping around or comparing offers, because they don’t want a bidding war. Instead, they want to get you “under contract” and obligated to sell to them.

One of the ways they do this is by making you a huge offer on minerals you don’t own. This trick here is that they’re offering you a lower price per Net Mineral Acre as a way to make their offer seem better than the competition. For instance, if you own 20 NMA, they might offer you $5,000 per NMA for up to 50 NMA for a “total” of $250,000. That’s an easy way to “beat” the competition who’s offering $7,500 for 20 NMA for a total of $150,000. They entice you with the big offer of $250,000, but when it comes to closing time (after you’re under contract), they’ll only pay you for the 20 you own for a total of $100,000… and you’re out $50,000.

If your minerals aren’t in Texas (which publishes ad valorem tax data), companies probably don’t know what you own. They might know that you own minerals in a given area, but they don’t know how much you own unless they’ve run title before making an offer (most don’t). So if you’re in North Dakota, New Mexico, Colorado, Louisiana, or Wyoming, and you receive an exact offer, be wary.

To protect yourself, we recommend landowners either (1) go with the company with the highest per NMA offer, or (2) ensure that the contract is clear that if the purchase amount falls below the original offer, you have the right to walk way.