One of the most common questions we get from mineral owners is about mineral rights value. We speak with mineral owners every day who want to know what the value of their property and help them better understand what factors can affect the value. Below we break down the important facts mineral owners need to know about the value of their mineral rights in West Virginia. The most important thing to remember is that mineral rights values are NOT like a house, there is no source of information that will tell you exactly what your minerals are worth.
What are your mineral rights worth in West Virginia
No one can give you an exact value for your mineral rights, but we can give you a range:
West Virginia – $0 to $5,000+ per acre for a lease in 2013
This is the best information you will find online, continue reading to find out why!
West Virginia Mineral Rights Value is Hidden
One of the reasons why it is so hard to figure out what your mineral rights are worth in West Virginia is that the information simply isn’t available. Unlike the housing market where sales prices are public record that can be searched, mineral leasing prices are not recorded at the courthouse. In fact, the Oil and Gas companies who lease mineral rights go to great lengths to hide the prices they lease for. They do this because they don’t want competitors and mineral owners to know how much they are willing to pay in an area. In short, searching finding reliable up to date information on what your property is worth is nearly impossible.
No two properties are identical
It’s important to realize that no two properties are the same. We often hear similar comments from mineral owners that say “someone right next door” and “our neighbor recently got $x”. Two properties can be extremely close together, even bordering each other, but the property value can be significantly different. This can happen for a number of reasons included geophysical differences, difficulty reaching the location, and a number of other reasons. Knowing what properties have been leased in your area for what price can be a big advantage, but the price someone else received does not mean you will receive something identical.
Timing Matters
Timing matters for a number of reasons. You may have received a lease 3 years ago and gotten substantially more than what is being offered today. This can happen because the prices of Oil and/or Gas has dropped, so lease bonus amounts have gone down. When the price of Oil or Gas drops, this makes drilling less profitable and reduces the amount an operator can pay for a lease. It’s also important to note that a single operator may be very interested in an area which can drive prices higher as everyone tries to secure leases assuming they are onto something big. This can create a temporary boom in an area increasing prices, but 6 months later the environment can change as they stop leasing all together or the area doesn’t prove to be as valuable as everyone thought. In short, the price 6 months ago can be vastly different whether higher or lower.
Limited Buyers
In the housing market, there are thousands of potential buyers or investors in a given area who could purchase your home. In the Oil & Gas market, there are sometimes only a handful of parties who are interested in leasing mineral rights in your area. When there are less buyers available, this can lead to a decrease in prices since buyers aren’t competing for properties.
Best Way to Determine Value
The best way to determine the value of your property is by listing it online so that multiple operators, investors, and professionals can submit an offer. It’s important to work with industry professionals who understand the area and how the factors that affect your property can affect price. We recommend listing with US Mineral Exchange. They are the industry leaders in mineral leasing and provide every service a mineral owner needs.
Free Consultation
If you own mineral rights and have questions, fill out the free consultation form below. We can help you with the following questions:
- Mineral Rights Value
- Evaluate whether you have a fair offer to sell mineral rights
- Answer questions about selling mineral rights
- Understanding Market Value of Mineral Rights
- + Any other questions related to mineral rights!
No matter what question you have regarding your mineral rights, we can help! We usually respond to your inquiry within 1 to 2 hours!
Whether you want to sell mineral rights, determine mineral rights value, or simply have some basic questions regarding your mineral rights ownership, fill out the form and we will quickly be in touch.
