If you own mineral rights in Texas, there’s a good chance you’ve received a letter, a postcard, or a phone call from someone offering to buy them. Maybe more than one. These offers can range from a few thousand dollars to six figures, and they often come out of nowhere, especially if you inherited the minerals and didn’t even know you owned them.
The question everyone asks is: “Is this a good offer?” But that’s actually the wrong first question. The right first question is: “Do I even know what I own?”
Most mineral owners who receive purchase offers have never had their title researched. They don’t know how many net mineral acres they own, whether there are producing wells on their acreage, what royalties they may be owed, or what development activity is planned nearby. The buyer who sent that offer? They already know all of this. That information gap is where mineral owners lose the most money, whether they sell too cheap or sell something they should have kept.
Here’s what we recommend you do before responding to any mineral rights purchase offer.
Step 1: Don’t Sign Anything Yet
This is the most important step, and it costs you nothing. There is no deadline that matters more than understanding what you own. Buyers often create a sense of urgency (“this offer expires in 30 days,” “we need to close by end of month”). In almost every case, that urgency is artificial. The minerals have been in the ground for millions of years. They’ll still be there next month.
If someone is pressuring you to sign quickly, that’s a reason to slow down, not speed up. A legitimate buyer will still be interested after you’ve had time to do your homework.
Also, read the paperwork carefully. Some buyers send a purchase offer that looks like a simple letter but is actually a binding agreement. Others send a mineral deed along with the offer, ready for your signature. If you sign a mineral deed and it gets recorded at the county courthouse, the transfer is permanent. Texas mineral deeds do not have a cooling-off period or a right of rescission. Once it’s recorded, those minerals belong to someone else.
Step 2: Find Out What You Actually Own
Before you can evaluate any offer, you need to know what’s being offered on. This sounds obvious, but most mineral owners don’t have a clear picture of their ownership. Here’s what you need to determine:
- How many net mineral acres do you own? This is the fundamental unit of mineral ownership. It’s not the same as surface acres. If your grandmother owned 160 surface acres but only retained half the minerals when she sold the land in 1955, you may only own 80 net mineral acres, or a fraction of that if the interest has been divided among multiple heirs over the years.
- Is there production on your acreage? If there are producing wells, you should be receiving royalty checks. If you’re not, there may be title issues, suspended funds, or money sitting in unclaimed property with the Texas Comptroller. This is something a title examination can uncover.
- What’s the development activity in the area? Are operators drilling new wells nearby? Are there permits filed? Is the area in an active part of the Permian Basin where horizontal development is expanding, or is it in a mature field with declining production? The Texas Railroad Commission’s online records can give you some of this information, but interpreting it takes experience.
- Are your minerals leased? If your minerals are currently under an oil and gas lease, the lease terms matter. The royalty rate, whether the lease contains a Pugh clause, whether it’s held by production on a single well while the rest of your acreage sits undeveloped: all of these affect value. The buyer already knows your lease terms. You should too.
- What’s your chain of title? If you inherited your minerals, there may be gaps in the ownership chain that need to be addressed. Missing probates, unrecorded deeds, heirship issues: these are common, and they affect both your ability to sell and the price a buyer will offer. A clean chain of title is worth more than a messy one.
Step 3: Understand What the Buyer Already Knows
Here’s something most mineral owners don’t think about: the company that sent you that offer has already done their homework on your property. They’ve researched the title, looked at production data, reviewed the lease terms, and evaluated the development potential. They didn’t pick your name out of a hat. They targeted you because the data told them your minerals are worth acquiring.
That means the offer they sent you is not their best estimate of what your minerals are worth. It’s the lowest number they think you’ll accept. There’s a margin built in for their profit, and in many cases it’s a substantial margin.
This isn’t dishonest on their part. It’s how buying works. But it means that the only way to evaluate an offer is to have the same information the buyer has. If you don’t know what your minerals are worth independently of the offer, you’re negotiating blind.
Step 4: Think Carefully About Whether Selling Makes Sense
Our general advice to most mineral owners is: don’t sell unless you have a specific reason to. Mineral rights are a long-term asset. They can produce royalty income for decades. They appreciate in value as development activity increases. And if you inherited them, you likely received a stepped-up tax basis that makes holding even more tax-efficient.
That said, there are legitimate reasons to sell. Medical expenses, estate simplification, a desire to cash out while commodity prices are strong, or a situation where the minerals aren’t producing and development seems unlikely. Every family’s circumstances are different, and we’ve helped clients on both sides of the decision.
If you decide that selling makes sense for your situation, we can help you through that process too. But we’d rather have that conversation after you know what you own and what it’s worth, not before. You can read more about how we help mineral owners evaluate offers.
Red Flags to Watch For
Not every mineral buyer operates in bad faith, but some do. Watch for these warning signs:
- Pressure to sign quickly. Legitimate buyers don’t need an answer by Friday. If someone is pushing a tight deadline, ask yourself why.
- A deed included with the offer letter. Some buyers send a ready-to-sign mineral deed along with their offer. This is designed to make it as easy as possible for you to transfer your minerals before you’ve had time to think it through. Never sign a deed that arrives unsolicited without having it reviewed.
- Vague or overly broad legal descriptions. Some purchase offers use blanket conveyance language that could transfer more than you intend. “All mineral interests in Reeves County, Texas” means everything you own in that county, even interests you didn’t know about. Read the legal description carefully, and make sure it matches only what you intend to sell.
- No mention of your specific acreage or production. If the offer doesn’t reference specific tracts, wells, or lease information, the buyer may be casting a wide net with low-ball offers, hoping a few people sign without asking questions.
- Offers that seem too good to be true. Occasionally, buyers will offer above-market prices to acquire minerals quickly in an area where they know a major drilling program is about to begin. The offer may seem generous today but look cheap six months from now when new wells come online.
What DLS Can Do for You
We’re a land services firm. We spend our days in county clerk records, tracing mineral ownership and examining title. When a client comes to us with a purchase offer, here’s what we do:
First, we research the title to determine exactly what you own: how many net mineral acres, what county and survey, and whether the chain of title is clean. Second, we look at production data and lease terms to understand the current income and future potential of the minerals. Third, we give you a clear picture of what you’re dealing with so you can make an informed decision.
We’re not a mineral buyer. We don’t make money when you sell. Our job is the research, and we get paid for the research whether you decide to sell, hold, or do nothing. If you do decide to sell, we can help you through the process, but that’s your call, not ours. We’d rather you make the right decision with good information than the fast decision with bad information.
If you’ve received a mineral rights purchase offer and you’re not sure what to do, give us a call or send us a message. The first conversation is always free, and we’ll tell you straight whether we think professional title research would be worth the investment for your situation.
This article is provided by Doggett Land Services, LLC for general informational and educational purposes only. Nothing in this article constitutes legal, tax, financial, or investment advice. Doggett Land Services, LLC is a land services firm. We are not attorneys, certified public accountants, licensed financial advisors, or licensed real estate brokers, and we do not provide legal, tax, or financial advice. The decision to sell or retain mineral rights depends on your individual circumstances. Always consult a qualified attorney or financial advisor before making decisions about your mineral interests. Doggett Land Services, LLC disclaims any liability for actions taken or not taken based on the content of this article.