What We Do
Flat River Minerals (“FRM”) was established in 2019 alongside its wholly-owned subsidiary, Rocking WW Minerals, to pursue mineral and royalty interests in Wyoming’s Powder River Basin. Founded by industry experts who had previously spent their careers on the exploration and production side, FRM set out to be among a new breed of mineral buyers focused on sustainable long-term investments driven by technical valuations. Following its initial focus on Wyoming, FRM has since expanded its reach out east into the premier gas fields of Appalachia with Cloud Peak Minerals, its second wholly-owned subsidiary. Across all its areas of focus, FRM’s team remains committed to setting a new standard on what it means to be a mineral and royalty acquisition company.
In addition to actively investing in minerals and royalties, the team at FRM manages the interests and portfolios of both Heritage Non-Op Holdings, LLC and Heritage Minerals Holdings, LLC. As previous subsidiaries of what was known formerly as American Energy Partners, the Heritage companies were formed in 2014 to pursue investments in the top shale basins in the US, including the Marcellus/Utica of Appalachia, Permian of Texas, and SCOOP/STACK of Oklahoma.
All together the FRM team manages interests in over 4,000 wells across five states and basins, split between non-operated working interest and royalty wells. Currently, FRM is focused on actively investing in minerals and royalties across the country through Rocking WW Minerals and Cloud Peak Minerals. FRM is headquartered in beautiful Sheridan, Wyoming with an additional office located in Canonsburg, Pennsylvania.
Areas of Interest
Flat River Minerals is actively investing in Appalachia (WV, OH, PA) and Wyoming.
Region of Operation Key
- Rocking WW Minerals
- Cloud Peak Minerals
- Nova Lux Royalities
- Heritage Non-Op
- Heritage Minerals
Technical Driven Approach
You can trust that our mineral valuations are reliable and accurate, driven by the three factors that matter most: geology, engineering, and drill timing.
Flat River Minerals maintains genuine relationships at every level of the business – from landowners in rural Wyoming and Appalachia to the industry’s most notable executive teams. We’re about doing what’s right, not what’s easy.
Get the most out of your interests
Flat River Minerals was founded by career oil and gas professionals specializing in operations and acquisitions. Our team of experts has decades of experience in exploration and production that enable it to accurately value minerals based on the three things that matter most: geology, engineering, and drill timing. We pride ourselves on our ethics and honesty – we’re not speculators, brokers, or flippers. You work directly with us when you sell your minerals, which ensures every dollar goes into your pocket.
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Mineral Rights & Royalties Tax GuideJuly 15, 2023
Whenever you earn income, the tax agency typically wants to receive its cut. That’s also true when you sell the mineral rights to your land or lease the rights and receive royalty payments. The taxes you might owe on your land’s minerals depends on where in the U.S. your land is and what you decide to do with your mineral rights. The income you earn might be taxed like regular income or considered a capital gain. Learn more about how the sale of mineral rights is taxed and what options are available to reduce your tax obligations. Are you considering selling your minerals or mineral royalties? Contact us today for a free valuation. Are Mineral Rights and Royalties Taxable? Any income you earn from the sale or lease of your land’s mineral rights is taxable. Income, severance and ad valorem taxes are some of the taxes you might need to pay. Each type comes from a different entity. For example, income taxes are usually paid to the state or federal government and, in some cases, both. Ad valorem taxes are usually paid to the county and severance taxes to the state. Ad Valorem Tax Ad valorem is Latin for “according to the value.” The amount of the tax is based on the assessed value of a property or item. A common example of an ad valorem tax is a real estate property tax. When you own a home or land, the real estate’s assessed value determines the amount of taxes you pay. The tax due on land worth $100,000 will be less than the tax due on land worth $200,000 if the real estate is taxed at the same rate. In Wyoming, ad valorem tax is a county-level tax. Each county in the state has its own rate, which can vary slightly from year to year. As of 2018, the average ad valorem tax statewide was 6.9%. To charge an ad valorem tax on oil and gas or minerals, the county needs to assess the minerals’, oil’s or gas’s fair market value on the property. Usually, the tax is only due when there is active production on a property. State and Federal Tax The income you earn from mineral royalties or the sale of mineral rights is often subject to federal and state taxes. The type of tax you need to pay depends on the type of income you earn. Is the sale of mineral rights a capital gain? If you sell the mineral rights, you might have to pay a capital gains tax on the sale profit. If you purchased the minerals, the profit is based on the difference between the value or price you paid for the mineral rights when you made the purchase and the amount you sold the rights for. If you inherited the minerals, the profit is based on the difference between the value of the mineral rights when you inherited them and the amount you sold the rights for. The tax rate depends on what your income bracket is and how long you had the asset. If you owned the mineral rights for less than one year before deciding to sell them, the tax rate would be the same as your income tax. If you owned the asset for more than one year, you qualify for the long-term capital gains tax rate. The rate for long-term capital gains is based on your income level. If you earn less than $80,000, your capital gains rate is 0%. The rate is 15% for single people earning between $80,000 and $441,450. Those who earn more than $441,451 each year pay a rate of 20%. According to the Internal Revenue Service (IRS), income taxes on mineral rights royalties work a bit differently. Capital gains taxes apply to the sale of mineral rights. If you retain your rights and lease them, therefore earning a royalty on the production, the royalty amount is taxed as regular income. Income tax rates tend to be higher than capital gain tax rates. Depending on the state you live in, you might need to pay income tax on your mineral royalty earnings, too. Income tax rates vary wildly from state to state, with some states charging a progressive tax, similar to the federal tax structure. Some charge a flat rate. Others, such as Wyoming, have no income tax at all. North Dakota has a progressive tax that ranges from 1.1% to 2.9% of income. Severance Tax What is a severance tax for oil and gas? Thirty-four states collect a severance tax on oil and gas extraction, among them North Dakota and Wyoming. Because North Dakota and Wyoming are mineral-rich states, the severance tax often proves to be a significant revenue source for each state. In 2017, 22% of North Dakota‘s revenue and 8% of Wyoming’s came from severance taxes. Severance tax rates vary based on the state and the extracted material. In Wyoming, the severance tax rate for minerals such as limestone, jade or clay is 2%, while natural gas or oil is 6%. In North Dakota, the severance tax is imposed in place of a property tax on land that produces oil or gas. The gross production tax for oil is 5%, while the gross production tax for gas is adjusted each year. Taxes on the Sale of Mineral Rights You might decide to sell your mineral rights for various reasons, such as the need for an immediate influx of cash or a desire to diversify your investment portfolio. It’s important to understand that if you sell your mineral rights, the tax situation will be different than if you kept the rights and leased them or earned a royalty from them. Tax Implications of Selling Mineral Rights Selling your mineral rights creates a different tax situation than earning a royalty. The IRS views the profits from the sale of mineral rights as a capital gain, not income. To figure out how much you might need to pay as a capital gains tax, you need to figure out your cost basis in the mineral rights. The cost basis is the original price or value of the asset — in this case, mineral rights. Figuring out the cost basis can be complicated, depending on how you acquired the rights in the first place. Generally speaking, the IRS considers an owner’s mineral rights cost basis to be zero, with three distinct exemptions: The cost included a specific amount for mineral rights. The minerals and surface were valued separately during the real estate tax valuation that determined the seller’s basis. There was ample evidence of the minerals’ value on the date of acquisition. Cost basis can also differ depending on whether you purchased the property or inherited mineral rights. Inheriting property often includes a step-up in basis, leading to a reduction in capital gains tax. Many owners do not know what the value of their minerals was at the time of inheritance, so don’t worry if you fall into this category. Professional mineral appraisers like Flat River Minerals can easily calculate historic values for you. Quick tip: if you inherited your interest via a probated estate, look through the probate documents for an estimated value. A few examples can help you see how to calculate capital gains and figure out what you might owe in taxes. Let’s say your income qualifies you for the 15% capital gains tax rate. You purchased the land and have a basis of $0 in it. Five years later, you decide to sell the mineral rights for $250,000. Since your basis is $0, your capital gain is $250,000. You would owe a capital gains tax of $37,500. In another example, let’s say you inherited mineral rights and have a cost basis of $75,000. Five years later, you sell the mineral rights for the same amount, $250,000. To figure out your capital gains, you need to subtract your basis ($75,000) from the sale price ($250,000). Your capital gains are $175,000. Taxed at a 15% rate, you’d owe $26,250. How to Report Sale of Mineral Rights on Tax Return If you have capital gains from the sale of mineral rights, you’ll need to report them on your federal income tax return for the year you made the sale. The purchaser of the mineral rights might send you a tax form, such as a Form 1099, but they might not. Keep records of your basis and the sale price to report your capital gains at tax time accurately. To report the sale, you’ll need to complete two additional forms when you file Form 1040. The first is Form 8949, which you use to tally up all of your transactions that resulted in capital gains or losses during the year. You’ll need to complete Schedule D to report your total capital gains. In this case, the tax treatment of
Mineral Rights Transfers ExplainedJune 2, 2023
The United States is one of only two countries that allow private individuals to own mineral rights. The term “mineral rights” refers to the ownership of underground resources like oil, silver, gold, copper, iron, natural gas and uranium. If you own mineral rights, you can search for, extract and sell these resources without authorization from the government. Transferring mineral rights is a legal transaction. This action typically requires a real estate deed, will or lease that outlines the types of mineral rights to be transferred and to whom. If you’re thinking about transferring your mineral rights, read on to learn more about the process. How to Transfer Mineral Rights There are several steps involved in transferring mineral rights to another person or group. 1. Prove Your Ownership Before you can transfer your mineral rights, you must prove that you own the rights. Providing proof may require in-depth research into the ownership history of the rights, known as the chain of title. Many people use a lawyer or title company to help with this process. Want to find out if you own mineral rights? Get in touch with our team. 2. Get Help From an Attorney Once you’ve determined you own the mineral rights and have decided what you want to do with them, a qualified attorney can help you make the transfer. A lawyer can advise you on the best way to transfer your mineral rights and draft the legal documents you’ll need. 3. Transfer Your Mineral Rights You can legally transfer your mineral rights in three ways: Transfer by deed: You can sell your mineral rights to another person or company by deed. Transfer by will: You can specify who you want to inherit your mineral rights in your will. Transfer by lease: You can lease mineral rights to a third party through a lease agreement. Do Mineral Rights Transfer With Property? Mineral rights do not necessarily transfer with the property. Typically, a property conveyance (sale) transfers the rights of both the surface land and the minerals underneath until the mineral rights are sold. Mineral rights convey or are conveyed — meaning transferred to a new owner — through a deed. At the time of the initial mineral rights conveyance, the property deed will include the separation of the surface and mineral rights. Subsequent land deeds will not reference the mineral rights transfer. This process means that when you buy a property, you may not be able to determine if you own mineral rights from your deed. Instead, you’ll likely need to hire a lawyer or title company to perform a mineral rights search to determine if you’re the owner. Sell Your Minerals to Flat River Minerals If you’re thinking about selling your mineral rights, Flat River Minerals is a company you can trust. We’re one of the few mineral and royalty acquisition companies in Wyoming. We’re intimately familiar with the region’s land, minerals and people, and we form genuine relationships with all our customers. When you sell to us, you can rest assured that we’ll keep your minerals local. We also eliminate the middleman to give you the best prices. Our in-house technical team provides highly accurate valuations, and we have the fastest turnaround rates on the market, with closes completed in one to ten days. If you’re ready to sell, submit your request for a free valuation or contact us for more information.
How Will Selling Mineral Rights Impact My Property?May 16, 2023
If you’ve inherited a piece of land with mineral rights, you may have considered what happens when or if you sell them. You may question if your mineral rights are worth anything or how selling them may alter your property. Flat River Minerals can help you understand the process from start to finish. Mineral rights property law states that whoever owns the dominant estate can alter the surface to explore natural materials. When you sell your mineral rights, you get paid the projected value of what lies underneath the surface while keeping full control of your property. Because of the nature of drilling, selling mineral rights can also change what happens to the exterior of your land. Should I Sell My Mineral Rights? When you transfer mineral rights, we give you a lump sum estimate of your land’s worth for the entire timespan we would use it. We determine value based on our technical knowledge of hydrocarbon mining. That way, you don’t have to worry about property value ups and downs over time. Selling the mineral rights on your property might be a difficult decision for you and your family. We understand that you may have emotional ties to the land or the inheritance. We follow Cowboy Ethics and the Code of the West, which means we value your choice and provide options to make you comfortable. What Happens After I Sell Mineral Rights? At Flat River Minerals we provide a valuation that gives you a real return on investment. After you sell some, most or all your mineral rights, we create an agreement. For many, this will mean using both the surface and underneath for our procedure to take place. To transfer mineral rights without affecting the surface, you can sell part of the property or speak with our team about your hesitations. We will walk you through the process and even show you how to enjoy tax savings when you sell. Trust Us to Keep Your Minerals in the West As a Wyoming-based company, we know how important land is to your family, business or connection to the state. That is why we get rid of the middleman and keep your minerals local. Our personalized process also allows us to give you the highest price on your property’s mineral rights. Our valuation will determine if your mineral rights are an asset you’d like to sell. We project the number of wells, and when, where and who can drill them to give you the most accurate estimate. Request a free property valuation online to begin the process.