Is there a way to estimate the average price per acre for mineral rights? Yes!
While there is no way to determine the exact value of mineral rights, we can estimate the average price per acre for mineral rights.
The estimates of mineral rights value below are just a rule of thumb. The rule of thumb for mineral rights value is based upon the status of your mineral rights.
Mineral rights fall into 3 categories:
Non-Producing: If there is no active lease on your mineral rights, and no don’t get royalty income, you have non-producing mineral rights. The rule of thumb for mineral rights value when they are non-producing is $0/acre to $1,000/acre. In many cases, the value is $0. The only time you can expect to get more than $0 is if you have an offer to sell OR you have a recently expired (within the last 12 months) lease. This acreage is considered pure speculation and has $0 value because it will likely be years (decades) before it produces income.
Leased: If your acreage has an active lease agreement, you can expect to sell for about 2x to 3x your lease bonus. For example, if you had 10 net acres and you leased them for $3,000/acre, you would expect to sell mineral rights for about $6,000/acre to $9,000/acre.
Producing: If you have producing mineral rights, this means you get paid royalties on a monthly basis. Some mineral owners get paid every few months if the value is less than $50/month. The value of mineral rights that are producing is broken down into two components:
1. Cash Flow Value: The cash flow value is based upon your royalty income. To determine the cash flow value of your mineral rights, find the average of your last 3 months of royalty income and then multiply this number by 3 years to 6 years. (Hint: Use the mineral rights value calculator below to estimate the cash flow value of your mineral rights)
2. Upside Potential: If there is space to drill additional wells on your acreage in the future, your mineral rights have additional value in the upside potential. If/when those wells are drilled, the value of the acreage will be higher. This value is very subjective and depends on how a mineral buyer evaluates the upside.
The estimated mineral rights values above are just estimates! If you are curious about estimating mineral rights value for your mineral rights, get a free consultation. There is no obligation and no pressure!