What You Need to Know About Selling Your Mineral Rights

Many owners of mineral rights wonder about their value and if it may be time to think about selling. Especially in areas of the country that are experiencing a high growth of exploration for oil and gas, selling your mineral rights could lead to a financial windfall that you may not have received otherwise. Along with natural gas and oil, some other minerals that are commonly extracted include coal, silver, and gold. If surface rights are also owned then shale, gravel and clay can be extracted from the surface as well.

How can you determine if you would do better by selling your mineral rights or holding on to them? It is really going to depend on you. Every individual has different financial goals, needs, and objectives. However, if the thought of selling your mineral rights has crossed your mind, here are some things to consider:

Consequences of Rejecting Cash Offers

Selling your mineral rights can be hugely profitable. The actual amount you can expect to receive will depend on how many acres you have. Making enough money to live comfortably for the rest of your life is certainly obtainable. Keep in mind that the entire oil and gas industry is amazingly fickle. A number of things can go wrong in the area where your rights are located, resulting in devaluation or possibly even making them worthless. If you accept an offer then the cash is already yours and the worries belong to the buyer.

Exploration Risks

Would you rather be selling your mineral rights for ten million today, or get absolutely nothing in five years? That is exactly what could happen in mineral exploration near your land turns up nothing of value. Drilling companies are not likely to pay you a tidy sum when all around is disappointment. If you are sure that the land contains significant valuable resources and still wants a lump sum of cash, consider selling only a partial percentage of your rights.

Some Points to Ponder When Selling Your Mineral Rights

Here are some various closing points that you may want to think about:

1. Cash is a sure thing. All of the gamble is taken by the buyer.

2. It may be a nice idea to take the money and enjoy the activities you wish to do before you die. You can travel, purchase a new home, give money to your children to enjoy while they are young, and whatever else you want to do with it.

3. You could be eligible for lease bonuses.

4. Selling rights is considered to be capital gains, meaning that it is taxed at a much lower rate than if you lease them out.

5. Oil and gas prices fluctuate all over the board. What could be retirement money now may only be a short vacation six months from now.

6. Proposed changes to the laws could have a detrimental effect on the industry.

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