When to Sell your Mineral Rights
There are many reasons for selling oil and gas royalties and mineral interests. Instead of waiting for your royalty checks to roll in, selling your interests would provide a lump sum cash payment up front. Divesting all or a portion of these interests can help pay off debts such as mortgages and car notes or a number of other financial burdens. Selling could also afford you the opportunity to travel, help fund a loved one’s wedding or college expenses or even give you the capital for a down payment on a new home or car.
In addition to the financial gains selling oil and gas royalties and mineral interests can provide, divesting your interests eliminates the hassle this type of asset management requires. Selling your interests also eliminates the need to pay yearly property taxes which are not assessed on the actual cash flow you receive, but rather on what the appraiser believes the future value of the property to be at that time. Income from interests is also considered as ordinary income and is subject to income taxes.
The most common reason for selling interests is that oil and gas properties are depreciating assets. Instead of waiting for the eventual production to cease, selling your interests eradicates the uncertainty surrounding these types of assets.
The process begins with a no obligation evaluation of your interests. In order to give you the most accurate offer, we will need to see copies of your most recent production statements. These production statements are accompanied with the checks you receive for your royalty interests and detail your individual interest amount and the production information.
Once our engineering team has completed their thorough evaluation, your account manager will extend an offer to you. If you choose to accept our offer, our title department will begin preparing the necessary documents to transfer title into our name. Royalty Clearinghouse pays all closing fees associated with the transfer of your interests.
Once the original executed and notarized assignment is returned to our office, we will begin our due diligence process which typically takes 10 to 15 business days. This process includes confirmation that there are no encumbrances on your ownership of the minerals, contacting the operator regarding the transfer of interests and verifying current production levels. After our due diligence process is complete, we are able to fund you via draft, company check or a wire transfer directly to your bank account.
If you feel that you are ready to look into the possibility of selling oil and gas royalties and mineral interests, contact a member of our team to begin a conversation.
We were approached by a Rancher in West Texas who was in need of cash in order to maintain his ranch's operations. He was interested in selling his mineral rights to solve his cash needs but as with his ranch, these minerals had been in his family for generations and he hated to let them go.
The Royalty Clearinghouse team provided several scenarios to him which included selling only a portion of his ownership interest. He discussed the options and eventually selected a 50/50 ownership split. The Royalty Clearinghouse team went quickly to work and ensured proper title transfer and funded his transaction within 10 days, allowing him to continue ranching.
Royalty Clearinghouse provides individual solutions to real-life problems. We cater our solutions toward each of our...more
Case Study #2: Royalty Clearinghouse purchases Independent Operator’s mineral rights, royalties and non-operated working interests for $3 million. ‣
A mid-size independent oil and gas operator was looking to sell its mineral, royalty and non-operated working interest assets. These mineral rights, royalties and non-operated interests were deemed non-strategic to its operated interests.
The Operator was evaluating multiple buyers including their ability to fund a large transaction and to close under a tight deadline. The portfolio of mineral rights, royalties and working interests consisted of over 590 leases and more than 2200 wells scattered across 44 counties in 8 states. The leases and wells were spread across multiple unconventional oil and gas shale plays including Eddy County, New Mexico (Wolfcamp and Bone Shales); Red Willow County, Nebraska (Niobrara Shale); McKenzie County, North Dakota (Bakken Shale); Sterling,...more
Case Study #3: Royalty Clearinghouse was asked to facilitate a quick value which turned into a multi-million dollar sale of the royalty interests during a difficult life event. ‣
Under time constraints, we were asked to evaluate and provide a fair market value regarding an individual’s override royalty interest in an oil and gas field. Working closely with the client, we provided a clear and transparent view of our engineering evaluation and how we derived the value for his royalty interest. There were also terms and special conditions in this particular agreement that affected the price and interest.
Understanding our clients’ circumstances, we were asked for a quick turnaround on a high dollar valuation. We were able to complete the entire process including due diligence, transfer of title, and funding within a two week period. Because of the relationship we built with this particular client, we have since been asked for additional evaluations and look...more