By Shariq Khan and David French

(Reuters) - A Texas family which owns 70,000 acres in the Permian basin is exploring options including a sale, putting up for grabs one of the largest family-owned tracts in the heart of U.S. shale country, people familiar with the matter said.

The land, known as the Mabee Ranch after late farmer-turned-oilman John Mabee who bought into it in 1932, is leased to energy producers including ConocoPhillips (NYSE:COP), Diamondback (NASDAQ:FANG) Energy Inc and Pioneer Natural Resources (NYSE:PXD) Co.

It is owned by relatives of Mabee, who died in 1961, with a stake also held by a charitable foundation he set up with his wife, Lottie.

The sources did not discuss the expected price of the site, but said it was expected to generate around $575 million of free cash flow in 2023 from royalties collected on oil and gas production alone.

The family had decided to cash out and distribute the property's worth to those relatives with stakes, the sources said, cautioning no deal was guaranteed. The sources spoke on condition of anonymity to discuss confidential information. Representatives for the Mabee Ranch did not respond to a comment request.

U.S. crude prices have receded from the 14-year high hit in March following Russia's invasion of Ukraine, but remain elevated.

The family is working with advisers to consider options that include the sale of the surface rights to work the land and mineral rights to extract oil and gas from it, as well as pipeline infrastructure supporting production, the sources said.

The buyer could use the rights or license them to others.

Should a sale happen, much of the value would go to family members, while some would go to the foundation, they added. The foundation's website says it has deployed nearly $1.3 billion since 1948, mainly funding healthcare, education, and religious buildings in six states including Texas, Oklahoma and Missouri.