One of the largest ranches on the market in Texas — an 80,000-acre property known as the Turkey Track Ranch — has a lower price tag and a stake in mineral rights that include access to oil and natural gas to sweeten the pot for a potential buyer.
Brokers are listing Turkey Track Ranch in the Texas Panhandle for $180 million, a $20 million discount to its previous listing of $200 million from November 2021. The price includes a 25% ownership stake in the property's mineral rights, said Bernard Uechtritz, founder of Dallas-based Icon Global Group, which is marketing the ranch for the second time over two years.
Icon signed a three-year agreement to re-list the ranch for sale through a global marketing campaign after not finding any buyers in 2022 and taking the ranch off the market in 2023. But Uechtritz expects the property to sell this year as ranches with natural resources attract institutional investors. It's also being marketed as a conservation opportunity, including proposals for carbon sequestration and initiatives involving wind, solar and water.
"Our campaign has also attracted institutional and conservation interest" around various environmental, social and governance initiatives, Uechtritz said in the statement. "Today, there is no shortage of firms who look to fulfill ESG mandates directly as well as via natural asset companies. This is an increasingly active and opportunistic market in the rapidly advancing environmental finance and investment space connected to the ranching asset class."
The ranch, touted by the owner as the "Prize of the Panhandle," is about six-and-a-half hours from the Dallas-Fort Worth region. The family ownership behind the Turkey Track Ranch have held the sprawling property — and its mineral and water rights — for more than 120 years. The ranch has never been traded before to an outside ownership group.
There's a rich history behind mineral rights in Texas, with them often becoming a lucrative part of any land deal in the Lone Star State. These policies, influenced by the laws of Spain and Mexico at the time, date back centuries prior to Texas becoming a state. Property sales in Texas prior to 1866 didn't include metals or minerals on the land unless the paperwork said otherwise, according to the Texas State Historical Association.
That changed with a provision to the state constitution in 1866 that gave landowners complete ownership of the minerals on their land and the right to produce them or lease them out to an operator.
For sophisticated ranch buyers, such as would-be purchasers of the Turkey Track Ranch, the mineral rights of a property would be essential to a sale offering, said Sam Middleton, owner of farm and land brokerage Chas. S. Middleton and Son, who is representing a buyer who might be interested in buying Turkey Track Ranch at a lower price point.
Appealing to More Buyers
"When you get into these larger transactions, you have sophisticated and knowledgeable buyers that demand some portion of the mineral rights," Middleton told CoStar News. "That cost of the mineral rights are factored into the overall price. If a ranch owner was wanting to sell without a stake of the minerals, it would eliminate over 50% of the buyers."
Ranches with mineral rights, including oil and gas production opportunities, and alternative energy sourcing options are gaining traction with would-be buyers, Middleton said.
In addition, there is potential for further oil and gas production from new technologies and exploration. A significant portion of the 80,000-acre ranch remains unexplored for oil and gas production, according to the statement.
Jonathan Grammer of U.S. Carbon Capture, based in Dallas, has spent two years with his team analyzing the subsurface geology of Turkey Track Ranch, and said it represents a lucrative revenue stream opportunity.
At the ranch, "the potential for long-term carbon sequestration and its lucrative revenue stream is one of the best in the Texas Panhandle," Grammer said in the statement. "Its proximity to carbon dioxide emitters combined with the unique storage zones of the Anadarko Basin, which lay beneath it, make this 80,000-acre jewel a strong candidate. In addition, because of our work, we believe shallower undeveloped zones may exist as well for future oil and gas development."
The current ownership group of the Turkey Track Ranch is considering an outright sale of the ranch to a potential buyer as well as retaining a partial ownership stake.
Kim McTee, a third-generation family member of the ownership group, said the family hopes to find an appropriate steward for the ranch.
"We were recently presented with an innovative concept incorporating a co-ownership model within our first round of offers, and we continue to explore this option," McTee said in a statement. "Expressions of interest continue and include conservation initiatives, even ideas for the reintroduction of buffalo to the plains area via the ranch are under evaluation."
For the Record
Farm lending specialist Capital Farm Credit is positioned to underwrite buyer financing for Turkey Track Ranch, according to the statement.