Selling Mineral Rights in Upton County
While Upton County only has a few thousand residents, it covers more than 1,200 square miles of land in West Texas. Because of this, many people in Upton County are approached about selling their oil, gas, or other mineral rights.
The sale of mineral rights is a process that many people are unfamiliar with, and some are completely unaware of what options may be available to them. If you find yourself being offered money for your mineral rights, you will probably wonder how fair the offer is.
Auction Mineral Rights assists clients all over Upton County and allows them to recoup maximum amounts from interested buyers through mineral auctions. When you work with us, you get access to our network of more than 11,000 possible buyers for your mineral rights.
Better yet, when you participate in one of our mineral rights auctions, you will only get serious buyers who are ready to pay top dollar for your rights. By having an auction, you can get these buyers to compete with one another and increase the value of your mineral rights.
Some people are tempted to accept whatever they are offered and be done with the entire mineral rights sale process as soon as possible. The great danger to this approach is that you risk leaving a considerable amount of money on the table that you will not be able to recover later.
You must be aware of the various tactics that deceptive sellers will use to trick you into selling your rights. One common form of deception is the option agreement, under which a person signs an agreement, but their rights are then sold to another buyer paying the third party more than what the individual who owns the rights is paid.
Some people are simply given a check to deposit and are told the mineral rights will be sorted out later. When a person deposits this check, it will commit them to the sale of their mineral rights without any ability to exit the agreement.
You can avoid all of these kinds of schemes by working with Auction Mineral Rights. We help people in Upton County and all over Texas. Call (512) 698-2802 or contact us online to schedule a free, no-obligation consultation.
Texas Mineral Rights Laws
Under Texas Property Tax Code § 1.04(2)(f), mineral interests are real property and a taxing unit’s taxes are based on its appraised fair market value. An exemption from taxation for a mineral interest a person owns is possible when the interest has a taxable value below $500, and the exemption can apply to every individual taxing unit that a person has a mineral interest in, although mineral interests are aggregated to determine their value.
Mineral interests become taxable on January 1 of the year following initial production of the unit. The first tax bill for interest must be sent in October of the same year.
The county appraisal district appraises property for property tax purposes for every taxing unit. It also determines the existence of taxable gas units, the value of the interests, and the names and addresses of the owners of interests in those units as well any exemptions that apply.
Upton County Appraisal District
The Upton County Appraisal District states that its mission is to “provide a uniform and equal market value appraisal according to the statutes of the Texas Property Tax Code accompanied by excellent customer service and transparency.” Upton Appraisal District is responsible for the fair market appraisal of properties within McCamey City, McCamey Independent School District (ISD), Rankin City, Rankin ISD, McCamey Hospital District, Rankin County Hospital District, Emergency Services District #1 (Rankin), Emergency Services District #2 (McCamey), Upton County, and Upton County Water District.
The Upton Appraisal District’s address is:
Upton County Appraisal District
700 E. 3rd St.
McCamey, TX 79752-1110
Mineral interests do not affect home values. Instead, they are interests in portions of underground gas reservoirs that often extend well beyond the boundaries of a home’s lot.
Many gas units have multiple wells, and every gas well is its own property. Because interest in a well has its own separate property tax account, every interest gets its own tax bill.
Railroad Commission of Texas
The Railroad Commission (RRC) of Texas is the state agency responsible for regulating:
- natural gas industry
- natural gas utilities
- pipeline transporters
- natural gas and hazardous liquid pipeline industry
- coal and uranium surface mining operations
- liquefied petroleum gas or liquid petroleum gas (LP-gas) industry
The RRC assigns the name of a unit and its identification number. The unit is a mineral interest, which is a fractional ownership interest in an underground reservoir.
The RRC’s main office is in Austin. The RRC has other locations in the state handling issues relating to oil and gas, pipeline safety, and alternative fuels.
In terms of oil and gas division district boundaries, Upton County is situated in District 7C. The district office for District 7C is in San Angelo:
622 S. Oakes St.
San Angelo, TX 76903
With pipeline safety, the RRC divides into seven regions, and Upton County is in the West Texas region. The RRC pipeline safety office is located at:
10 Desta Dr.
Midland, TX 79704
As it relates to alternative fuels safety, Upton County is in LP District 3. The alternative fuels safety office is located at:
622 S. Oakes St.
San Angelo, TX 76903
The RRC has three service audit locations in Austin, Houston, and Fort Worth.
Determining the Value of Your Mineral Interest
An appraiser is prohibited under state law from modifying the method used to appraise a real property interest in oil or gas for future proceeds generated by the sale of oil or gas. A method needs to include the average price from the oil or gas from the interest for the prior calendar year being multiplied by a price adjustment factor.
The average price for the previous calendar year is determined by dividing the sum of the monthly average prices by 12. Without any production, average prices rely on the sale prices of comparable oil and gas in similar interests.
Even when a lease does not produce every month of the previous calendar year, the appraisal price must mirror the price of comparable leases for all months, regardless of the months that the lease produced. The pricing of every year after the future first-year price has been determined is based on PPI Index data from 1982 to the most recent calendar year from the U.S. Bureau of Labor Statistics (BLS), and the Texas Comptroller Annual Gas Severance Tax Report and actual purchaser pricing are sources in these matters.
The United States Energy Information Administration (EIA) sets the Price Adjustment Factor (PAF) in its Annual Energy Outlook. The PAF is equal to the percentage increase or decreases projected for oil and gas prices for the following calendar year, and the first-year price, as well as calculated increases or decreases of pricing after the second through sixth years based on EIA data, is multiplied by your monthly average price for the prior calendar year.
Mineral interests must be reappraised annually based on the prior calendar year’s data. Market value does not always change, and the value could even increase when there is a decline in total reserves if the price per Mcf (meaning 1,000 cubic feet) increased.
Contact Auction Mineral Rights Today
The mineral rights brokers at Mineral Rights Auction can put your mineral interests in front of thousands of interested buyers. We can create a market that will allow you to get maximum value for your mineral rights.
We have extensive experience helping scores of people with the sale of oil royalties and gas rights, in addition to many other mineral claims. We assist clients in the development and signing of contracts as well as negotiating deeds.
You should also know that the Mineral Rights Auction provides all of these services free of charge. Our fees will be directly tied to the price of your property, which only incentivizes us to ensure that you get the most favorable deal possible.
People become interested in selling their mineral rights for a variety of reasons. Some individuals have understandable concerns about their estate plans, but others could be seeking tax relief.
The bottom line remains that negotiating the sale of your mineral rights is a risky proposition that too often leaves you exposed to dealing with unsavory characters who are not acting in your best interests. With Mineral Rights Auction, you will have someone on your side throughout the entire process, fighting tirelessly to get you the best deal.
You should not hesitate to contact Mineral Rights Auction to get free answers to every single one of your questions about your mineral rights. We can help discuss all of your options when you call (512) 698-2802 or contact us online to schedule a free consultation.