Each individual’s situation and motivations are unique.
Reasons to sell mineral or royalty interests may include:
Cash in Hand
We offer mineral rights owners the opportunity to receive an immediate lump sum cash payment rather than smaller, potentially volatile payments in the future.
Favorable Tax Treatment
Lease bonus payments and royalties are taxed at ordinary income tax rates. However, if you have owned your mineral interest for at least one year, the payment received from selling may be taxed as a long-term capital gain. We encourage mineral owners to speak with a tax professional for advice.
Distributing cash to heirs is simpler than fractionalizing a mineral estate. We can simplify your portfolio and empower you to make the best decision for yourself and your family.
Diversify your Portfolio by Selling a Depleting Asset
Natural gas wells decline in production over time – and so do your royalty payments. Selling your interest enables you to invest in another asset with the ability to potentially appreciate over time.
Delay in Development
As a mineral rights owner, you are not in control of the development of, or the profit from, your mineral interest. A lease can give drilling companies up to 10 years to drill on your land. Property located away from existing pipeline or on top of coal mines may experience significant delays in production. a mineral owner may prefer to receive cash for a portion of their minerals today.
Marginal or Non-Economical Wells
Low-output wells can occur despite proximity to high-output wells. Selling a portion of your mineral interest can hedge against the risk of poor production.
No Guarantee Your Land Will be Drilled
Not all mineral rights can be drilled in our lifetime. In addition, renewable energy such as solar and wind power may take market share from oil and gas over time, reducing the probability of a property being drilled.
1031 Exchange into Real Estate
Exchange your depreciating oil and gas assets for appreciating real estate assets while deferring your capital gains tax via a 1031 exchange. Please contact a tax professional for tax advice.
Hassle of Ownership
Owning non-producing minerals requires annual tax payments and lease negotiations. Once a property is drilled, the mineral owner often must search for title information to prove ownership prior to royalty funds being released. Further, royalty statements must be heavily scrutinized as operators frequently underpay royalty owners.
It can take up to 15 years’ worth of royalty payments
to equal what we can offer you today.