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Mineral Rights Transfers Explained

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Net mineral acres vs net royalty acres

Mineral Rights Transfers ExplainedJune 2, 2023

How to Transfer Mineral Rights   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 have the right to explore for, develop, and/or sell these resources without authorization from the government (you would need the relevant state permits to drill an oil or gas well). Transferring mineral rights constitutes a real property transaction, and as such, requires a deed be recorded in the county where the property lies 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 our two methods of mineral rights transfers — outbound and inbound. Outbound Process We'll initiate the transfer process for minerals we've already identified. Here's a look at the process: We'll contact you via email, phone call or text message. We'll make an offer to purchase. Upon agreement of a price, you'll get a short-form purchase to review and execute. You'll need to comply with the due diligence period, which is typically 30 days for one parcel. After the completion of the due diligence period, our in-house team will run the title from homestead patent to present to ensure there are no issues that would result in a defect to your ownership of the minerals. We'll provide the mineral deed to execute the order of payment. To close the deal, we'll pay you with a wire or check based on your preference. Inbound Process Another manner of mineral rights transfer is for you to come directly to us. Here's what the process looks like when you initiate it as a seller: You provide us with what you believe your mineral ownership to be. We'll give you an offer to purchase based on what you've represented to us. Once you agree to the purchase price, you'll enter a due diligence period. The duration is usually 30 to 45 days to confirm that you own what you've stated. If we find you own more or less than expected, we'll modify the purchase price accordingly before we close the deal. Do Mineral Rights Transfer With Property? Mineral rights do not necessarily transfer with the property. A property conveyance, generally referred to as a sale, transfers the rights of the surface land, along with the minerals under it — unless and until the mineral rights have been previously sold or severed from the surface. A deed typically represents a transfer of real property, which may convey raw land, a residential property, a commercial property, or minerals amongst other classifications. A “Mineral Deed” effectuates the conveyance of mineral rights to a new owner without the surface. A Mineral Deed can be used for the initial severance of minerals from the surface estate, and is also used thereafter to convey the now severed mineral estate. Oftentimes, deeds conveying surface property - such as a Warranty Deed used when selling a home - will not reference a previous severance of the mineral estate. This means that when you buy a property, you may be unable to determine if you own mineral rights just from your deed. Instead, you'll likely need to hire a lawyer or title company to research your historical chain of title to understand whether you own the mineral estate under your property. 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 that focus on buying directly from the mineral owner and not through a middleman or broker. This means you get the full value of your minerals in your own pocket! With local bases in Wyoming and Pennsylvania, we're intimately familiar with the land, minerals, and communities in the Rockies and Appalachian regions, 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. Our in-house technical team provides highly accurate valuations to ensure you get the best pricing for your mineral's worth. We also have some of the fastest turnaround rates on the market and will close your deal in 30 days or less. If you're ready to sell your minerals, submit your request for a free valuation or contact us for more information.
what happens when you sell mineral rights

Should I Sell My Mineral Rights?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 You Sell Your 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 You 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. { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://flatriverminerals.com/resources/blog/how-will-selling-mineral-rights-impact-property/" }, "headline": "Should I Sell My Mineral Rights?", "description": "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.", "image": [ "https://flatriverminerals.com/wp-content/uploads/2023/03/01-When-you-sell-your-mineral-rights.png", "https://flatriverminerals.com/wp-content/uploads/2021/12/02-Trust-RWW-to-keep-your-minerals-in-the-west-R01.png" ], "author": { "@type": "Organization", "name": "Flat River Minerals" }, "publisher": { "@type": "Organization", "name": "Flat River Minerals", "logo": { "@type": "ImageObject", "url": "https://flatriverminerals.com/wp-content/uploads/2023/03/flat-rivers-logo-small.svg" } }, "datePublished": "" }

what is mineral interest

Types of Mineral Interests and Royalty InterestsApril 8, 2023

Table of Contents:  Types of Mineral Interests Mineral Interest Working Interest Non-Executive Mineral Interest Royalty Interest Mineral Interests Vs. Working Interests What Is a Royalty Interest In Oil & Gas?  Types of Oil & Gas Royalty Interests  Get a Free Mineral Rights Valuation The United States is just one of a handful of countries that allows citizens to own the minerals, oil, gas and rocks found beneath the land’s surface. In most countries, anything located under the ground is the government’s property. If someone living in one of the countries that don’t allow citizens to own the minerals below the surface wanted to sell or extract the material, they’d have to get permission from their government. In the U.S., landowners have full enjoyment of their property, including what’s above and below the surface, due to an ownership structure called fee simple ownership. They have the option of splitting their estate, which severs the rights to the minerals below ground from the ownership rights of what’s on the surface. If you are curious about the process of selling your mineral rights, it helps to become familiar with the terms used in this industry and the various types of mineral and royalty interests available. Are you interested in selling your minerals or mineral royalties? Contact us today for a free valuation.  Types of Mineral Interests The different types of mineral interests determine how much sway an owner has over the land and how much they are entitled to receive from the extraction or sale of their minerals. Below, we’ll explore a few different types in more detail and outline how mineral royalty rates and payments work in various situations. Mineral Interest Someone who has a mineral interest in a property has full executive rights to the minerals found on, in, or beneath the land. They can explore the minerals, develop them and arrange for mineral production. They can receive royalties, rental payments, and lease bonuses for the minerals found on the property. A company or individual can acquire a property’s mineral interest from a fee-simple owner, thereby severing the minerals from the surface. In this instance, the original owner can retain full control of the surface while a completely separate individual or company owns and manages the mineral rights. In separating the minerals from the surface, the mineral ownership takes on a life of its own with its own chain of title through the years. An entity or individual can also own just a portion of the mineral interest. When an owner possesses less than 100% of the mineral interest, they own a fractional mineral interest. Individuals who inherit the mineral interest from their parents or grandparents might end up owning fractional interests as well. For example, a parent might leave their three children equal shares of the mineral interest. Each child owns 33% of the mineral rights. When those children pass away, they leave the right to their own offspring, further fractioning the mineral interest. Having a mineral interest in a property entitles an individual or entity to the following: The right to receive a leasing bonus. The right to delay rental payments. The right to execute a lease and transfer the rights to the lessee. The rights to royalties from production. The right to produce, develop or explore minerals beneath the surface. Another thing worth mentioning about mineral interest is that it is stronger than surface interest. Someone with a mineral interest in a property has the right to use the surface as needed to extract, develop or explore the minerals beneath. This is why minerals are commonly referred to as the “dominant estate.” Working Interest A mineral interest owner can enter into a lease with a company that wants to drill wells on the land for mineral extraction. The lease gives the oil or gas company a working interest in the property. With a working interest, the company has the right to develop, produce or explore minerals found beneath the surface (and pay for it all). The entity that holds the working interest takes care of the expenses associated with drilling and extraction. Their portion of the proceeds is equal to the production revenues less all the royalties that are paid out to the mineral owners. If they pay an average royalty of 20% to royalty owners, this may seem like a lot. However, the 80% of production revenues they receive has to cover the millions of dollars they spent drilling, completing, and producing the well. Many folks don’t realize that the oil companies are operating in the red until a well “pays out,” which is the point when they’ve accrued enough revenue to break even on the drilling and completion expenses. A well usually takes years to pay out, and if an operator has bad timing with oil prices, sometimes they never do. Luckily, the royalty owners get paid along the way, even if a well never pays out! Non-Executive Mineral Interest A non-executive mineral interest (NEMI) is similar to a full-fledged mineral interest. The most significant difference is that an individual or entity that holds a NEMI does not have the ability to enter a lease. Instead, someone with a NEMI can earn lease payouts and royalties. Usually, the size of the royalty payments and lease payouts is determined by the primary mineral interest owner. It’s common for people who inherit mineral rights to receive a NEMI for oil and gas. A landowner might also decide to cede their executive rights to the minerals when they sell the land’s surface but wish to retain a non-executive stake in the mineral interest. Royalty Interest After signing a lease with an oil or gas company, a royalty interest will be calculated in any wells that are drilled and produced using the royalty percentage set forth in the lease (“lease rate”). This royalty interest gives the owner a portion of the drilling or extraction revenue without paying for the extraction process themselves. Often, the royalty interest is described on the lease as a percentage or fraction. For example, let’s assume an owner signed a lease for a 20% royalty. This royalty isn’t for 20% of all oil and gas pulled out of the ground; it must be proportionately reduced to the number of net mineral acres contributed to an owner’s lease against the drilling unit as a whole. For example, if you leased 10 net mineral acres at 20% and the operator successfully drilled a 2-mile well, there will be around 1280 net leasehold acres sharing in that well (the “drill spacing unit”). This means your net royalty interest is 20% * (10 NMA/1280). The mineral royalty interest exists for as long as the company that leases the land continues to drill. Once the drilling stops, the interest is gone. At that point, the mineral interest holder can lease working interest to a different company. In some cases, a mineral rights owner might have several leases going simultaneously, depending on each one’s clauses and terms. Mineral rights owners might decide to sell royalty interest to a separate party, retaining the executive rights and mineral interest. Two examples of royalty interest that mineral rights owners may take advantage of include non-participating royalty interest and overriding royalty interest. Mineral Interest vs. Working Interest Simply put, the person who takes the lease from an owner (“Lessee”) is the working interest owner. They take on all the risks and pay all the expenses of drilling and completing well(s), but their right to explore for and develop minerals ends once a lease terminates pursuant to its terms. The mineral interest owner is the person granting the lease to a company or agent thereof (“Lessor”). Throughout everything, the mineral interest holder has full rights to the property and full ownership of the minerals that might exist there. What Is a Royalty Interest in Oil and Gas? What is the definition of royalty interest – oil and gas? When someone has a royalty interest in oil or gas, they own a part of a resource or have a right to some of the revenue the resource produces. The owner of a royalty interest doesn’t have any responsibility for the cost of operating wells or drilling for gas or oil. Three types of oil and gas royalty interests exist: 1. Ownership Interest An ownership interest might be the most common type of royalty interest. Someone with an ownership interest owns the property, as well as the rights to what’s beneath the surface of the land. A company that wishes to drill into the land to extract any oil or gas found beneath it has to take a lease from the mineral owner before they can begin operations. Usually, the company offers to give the owner a royalty payment. The payment might include a sign-on bonus along with the royalty interest payment. The lease rate the owner receives depends largely on (i) the competition for leases, (ii) perceived risk (i.e. an unproven area will fetch lower royalty in exchange for the risk taken on by the operator), (iii) oil price, and (iv) long-term well economics. A landowner can sell part or all of their royalty interest if they need or want to. 2. Non-Participating Royalty Interest Like an ownership interest, a non-participating royalty interest (NPRI) is a non-cost-bearing interest in oil and gas production. If a landowner wants to sell their property but maintain a stake in the payments for the oil or gas beneath the surface, they might reserve an NPRI, allowing them to keep a stake in the profits. Similar to when minerals are severed from the surface, NPRIs are essentially royalties severed off the minerals. Non-participating royalty interests are called so because unlike the mineral owner, they do not get to participate in lease signing bonuses, rental payments, or the lease negotiations themselves; they just enjoy the production proceeds that are derived therefrom. An example of an NPRI would be if a mineral owner were to carve off 3% NPRI from their negotiated lease rate. Referring back to the 20% lease example under the Royalty Interest section above, that would mean the mineral owner now gets a proportionate share of production based on a 17% royalty, while the NPRI owner gets 3%. In some cases, a landowner might decide to sell an NPRI when they need cash. If a landowner needs several thousand dollars to do something like make a big purchase, cover medical bills or complete a renovation, they can enter into an agreement with an individual or company. In exchange for a lump-sum payment, the mineral owner can offer the individual or business a percentage of the royalties on the land. When production begins on the land, the person or company who bought the NPRI will begin receiving payment from the operator based on the percentage defined in the royalty deed. 3. Overriding Royalty Interest (ORRI) Remember working interest owners (“Lessors”)? Well, let’s bring it back to them. ORRIs are additional burdens created on a lease by a Lessor, usually at the time when they sell a lease to another oil company. For example, if a landman took an 18.75% lease from you, they can sell it to another oil company while reserving a 1.25% ORRI. This doesn’t subtract from what the mineral owner gets paid, it just adds another royalty burden to what the oil company has to pay. Now they’re on the hook to pay 18.75% to the mineral owner, and another 1.25% to the landman. Unlike mineral and royalty interests, ORRIs run with the lease and not the land. That means they’re in effect for only so long as the lease is in effect – they expire when the lease expires. Historically, it’s been typical for geologists or landmen to receive payment for work with ORRIs rather than cash day rates. When the wells came in good, this was a pretty sweet deal! When the wells were dry holes, the geologists and landmen went back to their day jobs. Are You Considering Leasing Your Minerals? How much are the minerals beneath your land worth? If you’re interested in leasing your minerals or selling a royalty interest in them, Flat River Minerals can provide you with an accurate valuation backed up by honesty, integrity and transparency. Our company is rooted in cowboy ethics, meaning we believe it’s important to do what’s right, not what’s easy. We specialize in mineral royalties in Wyoming, Ohio, Pennsylvania and West Virginia and pride ourselves on using the three most important factors — drill timing, engineering and geology — when making a mineral valuation. Learn more about our process and get started with a free valuation today.

Net mineral acres vs net royalty acres

Mineral Rights in WyomingMarch 8, 2023

Table of Contents Wyoming Oil and Gas Industry Most Important Regions in Wyoming How to Sell Mineral Rights in Wyoming In the U.S., private individuals can own subsurface minerals, allowing people to sell, extract and explore an area for minerals without government approval. Owning land does not necessarily mean you own the minerals beneath your property’s surface. Sometimes, mineral rights are sold separately from the land’s property rights — known as a split estate. This is also the case in the Cowboy State of Wyoming. Split estates are prevalent in Wyoming because of the land’s natural resources. Wyoming is rich in natural oil and gas deposits, making mineral ownership in the region especially lucrative and desirable. Are you interested in selling your mineral royalties or selling your mineral rights in Wyoming? Contact us today for a free valuation.  Wyoming Oil and Gas Resources Wyoming contains a number of oil and gas fields and basins that produce a significant amount of hydrocarbons. These basins spread throughout the state – in fact, 21 out of 23 counties in Wyoming are oil and gas producers! Altogether, Wyoming contains around 943 million barrels of oil, which translates to about 2.4% of U.S. oil reserves. Additionally, Wyoming contains an excess of dry natural gas, equal to about 4.9% of dry natural gas in the U.S. Wyoming Oil and Gas Industry Wyoming ranked eighth nationally in crude oil and natural gas production in 2021, making the oil and gas industry the biggest in the state. Around 20,000 Wyoming residents work in the oil and gas industry, contributing $1.23 billion to the state government in 2020. Out of the hundreds of holes drilled in Wyoming, 50% found oil, and 37% found gas. According to these figures, the Wyoming oil and gas industry is the most profitable sector in the state. As a result, owning mineral rights in Wyoming is especially lucrative. Mineral ownership has previously led to clashes between landowners and mineral rights owners over the years because of the potential profit margins. Most Important Regions in Wyoming In Wyoming, certain regions contain more gas and oil than others which can be traced back to ancient shallow seas. Some areas in Wyoming that are rich in oil and gas include: Powder River Basin: Although known more commonly for its coal deposits (it supplies about 40% of coal in the U.S), the “PRB” has become a significant horizontal oil play and is home to some of the US’ top operators. The Bighorn Basin: This basin is in north-central Wyoming. It is a significant petroleum source, as it has produced more than 1.4 billion barrels of oil since the 20th century. Wind River Basin: This basin is located in central Wyoming, and is home to Wyoming’s first oil well (Mike Murphy #1), containing over 60 oil and gas fields. Greater Green River Basin: This basin is in southwestern Wyoming and boasts 30 different natural gas fields, namely the Jonah Field, Pinedale Anticline, Washakie Basin, Moxa Arch. If you own mineral rights in one of these regions, they may be valuable on the open market. A mineral rights valuation will help you determine how much your minerals are worth.   Additional Wyoming Mineral Rights Facts Wyoming’s oil reserves make up 2% of all U.S. oil reserves. The first oil well in Wyoming was drilled in 1884. The first refinery built in Wyoming was in Casper and began producing crude oil in 1895. How to Sell Mineral Rights in Wyoming If you’re a Wyoming resident and don’t know if you own your mineral rights underneath your land or need to know how to sell your mineral rights, let us help! At Flat River Minerals, we specialize in the mineral industry, so you can count on us to dig up any information about your mineral rights. If you are a Wyoming mineral rights owner and want to know how much your minerals are worth, you can contact us for a free valuation. { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://flatriverminerals.com/resources/blog/mineral-rights-wyoming/" }, "headline": "MINERAL RIGHTS IN WYOMING", "description": "Wyoming is rich in natural oil and gas deposits, making mineral ownership in the region especially lucrative and desirable. Learn about the oil and gas industry in Wyoming.", "image": "https://flatriverminerals.com/wp-content/uploads/2021/12/02-Trust-RWW-to-keep-your-minerals-in-the-west-R01.png", "author": { "@type": "Organization", "name": "Flat River Minerals" }, "publisher": { "@type": "Organization", "name": "Flat River Minerals", "logo": { "@type": "ImageObject", "url": "https://flatriverminerals.com/wp-content/uploads/2023/03/flat-rivers-logo-small.svg" } }, "datePublished": "" }

Net mineral acres vs net royalty acres

Net Mineral Acres vs. Net Royalty AcresFebruary 28, 2023

As a mineral rights owner, it is essential for you to know how to calculate your net mineral and/or net royalty acres. These figures are required in order to estimate the full value of your property, which will likely influence your decision to sell. If you are looking to sell or want to know more about your mineral rights, finding out the value and number of net acres is a significant first step. No matter when you decide to sell, understanding your interests will inevitably be helpful to you later down the road, including confirming you are being paid royalties correctly on a well. Learn more about the difference between net mineral acres and net royalty acres, as well as how to calculate mineral rights value per acre. Are you interested in selling your minerals or mineral royalties? Contact us today for a free valuation.  What Are Net Mineral Acres? A land tract’s gross acreage is different from your net mineral acres. Often, the gross acreage is divided amongst a few different people or entities. That is where net mineral acres come in to give you a better idea of your actual average. Net mineral acres (NMA) are the total acreage owned out of the gross amount. Because the gross acreage often splits between multiple parties, the NMA represents the share of land you have rights and ownership over. The percentage you own out of the gross tract acreage is called your Mineral Interest. How to Calculate Net Mineral Acres To calculate the NMA, you need the gross number of acres and the percentage of your mineral interest. To complete the calculation, simply multiply the gross acreage by your mineral interest. For example, if you owned 25% interest on the minerals under a 400-acre tract of land, you would have 100 NMA. The net mineral acres formula would be: 400 * 0.25 = 100 NMA [CP_CALCULATED_FIELDS id="6"] With this formula, you can calculate the number of net acres every party owns in the land tract if you know their mineral interest. Understanding your NMA figure is the first step to calculating your net royalty acres, which is vital for selling or evaluating your mineral rights. What Are Net Royalty Acres? Net royalty acres are the amount of money you can receive per acre. This term is most often used by mineral and royalty buyers when determining the property’s total potential value before making a transaction. This step is where the NMA comes in. If you go to sell your property without knowing your NMA, you could over- or underestimate your potential earnings. You can calculate your NRA if you know your royalty percentage and NMA. How to Calculate Net Royalty Acres The industry currently has two ways of defining and calculating NRA, which we like to call the “old” way and the “modern” way. Old Way: The old way was first defined in the 1950s when a ⅛ royalty was the standard rate. To clear up confusion surrounding some royalty assignments that occurred in the 1940s, a Mississippi court came to the conclusion that 1 NMA = 1 NRA leased at ⅛. Because ⅛ is no longer the going lease rate, the industry has had to adapt this definition in order to “normalize” a higher royalty back to what it would translate into at ⅛. NRA Normalized to ⅛ Example: You have 100 NMA leased at 18.75%, and an offer to purchase for $100,000 (100 NMA * 8) * 18.75% royalty = 150 NRA to 1/8 Price per NRA = $100,000/150 NRA to 1/8 = $666 Because ⅛ is no longer a “normal” lease rate, the formula used above can cause confusion and miscommunication, inflating numbers so that your net royalty acres actually appear higher than the number of net mineral acres you own. Modern Way: The modern way of calculating NRA (sometimes called NRA to 100%) is actually the first step in getting to your wellbore interest, which is your share of actual production from a given well. Calculating NRA to 100% allows for a better understanding of the value of your minerals as they are extracted. Modern Example: If you had 100 NMA leased at 18.75%, and an offer to purchase for $100,000 100 NMA * 18.75% royalty = 18.75 NRA Price per NRA = $100,000/18.75 NRA = $5,333 If you want to take it a step further and calculate your interest in a wellbore, just divide this NRA by the drill spacing unit (“DSU”). Example: 18.75 NRA/1280 DSU = .015 wellbore interest. [CP_CALCULATED_FIELDS id="5"] If your minerals are currently unleased, calculate your NRA using the royalty rate you could lease your minerals for on the open market, which often varies from basin to basin. Why Do I Need to Know My NRA? There are a few reasons to know your NRA before you meet with a mineral buyer. Knowing what your land is worth can help you get the best deal. When working with multiple buyers to determine a price, having a baseline of value can simplify the process. If you can’t determine the value, and the transaction is based on the NRA, make sure the terms are explicitly stated in the agreement. Have more questions about mineral royalties? Visit our FAQ page for answers! Net Mineral Acres vs. Net Royalty Acres Net mineral acres and net royalty acres have similar names, but they define two very different aspects of your property. NMA can explain the physical amount of land relative to the interest rate, but it cannot tell you how much your property is worth. NRA can calculate that land’s worth in dollar values. The other main difference between NMA and NRA is how they are used to sell and purchase mineral rights. In this case, the NMA leads you to the NRA, which is the key price when determining a land tract’s total potential royalty value. Selling your mineral rights is a big decision. If you are considering selling your minerals, knowing both your NMA and NRA can help you get the best deal available. Working with a company can simplify the process significantly and help you get the most from your property. When you want to learn more about selling from a trusted company, Flat River Minerals can assist you. We can help you discover your property’s value while saving you time and effort. We streamline the process so you can understand your property value without waiting on an outside valuation team. Sell Your Minerals With Flat River Minerals When it’s time to sell your mineral rights or mineral royalties, you want to make sure you find someone who will give you a good price without sacrificing trust. Selling to a long-term buyer can help you feel confident in your decision and keep your minerals in Wyoming. Flat River Minerals is a local Wyoming company providing a market for mineral asset owners to liquidize with no hassle. We keep your minerals local to support the state’s industry. Rather than taking your minerals and leaving, our local professionals help you get compensated while safely extracting minerals for local use. We eliminate the middleman to give you the highest price possible. Our in-house technical team can quickly evaluate your property with no outsourcing required to provide a better estimate. We have the fastest turnaround rate on the market, with our closes completed between one and 10 days. If you are ready to sell your minerals or mineral royalties, fill out our free valuation form to start, or contact us online for more information. Keep your minerals in the West with Flat River Minerals. { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://flatriverminerals.com/resources/blog/net-mineral-acres-vs-net-royalty-acres/" }, "headline": "NET MINERAL ACRES VS. NET ROYALTY ACRES", "description": "As a mineral rights owner, it is essential for you to know how to calculate your net mineral and/or net royalty acres. Learn more about the difference between net mineral acres and net royalty acres, as well as how to calculate mineral rights value per acre.", "image": [ "https://flatriverminerals.com/wp-content/uploads/2023/03/about-1-1.webp", "https://flatriverminerals.com/wp-content/uploads/2021/05/05-Get-In-Touch-REV01.jpg" ], "author": { "@type": "Organization", "name": "Flat River Minerals" }, "publisher": { "@type": "Organization", "name": "Flat River Minerals", "logo": { "@type": "ImageObject", "url": "https://flatriverminerals.com/wp-content/uploads/2023/03/flat-rivers-logo-small.svg" } }, "datePublished": "" }

how to sell mineral rights

How to Sell Your Mineral Rights or RoyaltiesDecember 15, 2022

If you’re like many property owners in Wyoming, West Virginia, Pennsylvania or Ohio, you may own valuable mineral rights consisting of oil or natural gas that may have been in your family for generations. In many cases, these rights are separate from the “above-ground” real estate, a situation known as a severed or split estate. Thus, it’s possible to sell your rights and still maintain the remainder of your property. What Are Royalty Payments? Some mineral owners may also hold a royalty interest. Royalties are payments the owner receives from the value of oil and gas production on a property. How Do Royalty Payments Work? In a typical royalty arrangement, the producer pays the property owner a percentage of the generated revenues. The royalty interest owner typically does not pay for the drilling or other production costs. Are you interested in selling your minerals or oil and gas royalties? Contact us today for a free valuation.  Why Sell Mineral Rights? If you own mineral rights, you may face a difficult decision — should you sell or keep them? The choice doesn’t always come down to dollars and cents, especially for long-term owners who consider the rights valuable family heirlooms. It’s often implied, if not stated, that the minerals must remain in the family and never be sold to outside investors. While the decision to offer mineral rights for sale can be painful, it can provide numerous advantages for the seller. The most obvious benefit is that you can receive a lump sum cash payment to use as you see fit. You can pay off debt, finance your child’s education, fund your retirement or invest the money. Selling the rights before you die can also facilitate the estate settlement process. Transferring mineral rights to your children or heirs upon your death can be time-consuming and expensive, especially if they must pass through the probate process. Selling the rights and distributing the assets to the people you choose while you’re still alive can offer a less complicated and more cost-effective solution. Mineral rights can also cost owners plenty in taxes. Depending on your financial situation, it may not be worth the time or money to hang on to the rights and make selling them a more viable strategy. Why Sell a Mineral Royalty Interest? If you’re receiving mineral royalties, you’ve probably experienced the uncertainty of these revenue streams. If you own producing lands, you’re at the mercy of the production company’s operational decisions, which can increase or decrease the monthly production volumes attributable to your royalty. Another problem facing Wyoming mineral owners, in particular, is a scenario where operators have control of large swaths of acreage, with no near-term plans of development. If your land is under one of these operators’ future drilling units, you may not see any royalty income for a decade or more. However, the biggest benefit we see in selling mineral or royalty interests is the ability to diversify away from volatile commodity prices. Oil market fluctuations have always been unpredictable – the industry has always been cyclical. However, the advent of new technology has been our own worst friend when it comes to oil prices – we’ve gotten too good at producing oil, and in turn, have outpaced demand. Liquidating some or all of your mineral interests can give you the ability to divest in more stable long-term assets like bonds, index funds, or real estate to name a few. How Do I Sell My Mineral Rights? If you’ve decided that selling your mineral rights is in your family’s best interests, your best bet is to find a credible company that specializes in mineral rights acquisition. The entity you select should have an extensive track record of satisfied landowners within your state. It should also have a reputation for offering fair prices and a fast, seamless closing and settlement process. In a typical scenario, the mineral rights buyer will present a basic purchase agreement and a mineral deed. Warning Signs When Choosing a Mineral Rights Acquisition Company As with any industry, there are “good” and “bad” mineral rights acquisition firms. It’s imperative to know the difference before signing on the dotted line. Some red flags to watch for include: Bank draft traps. Some prospective buyers may attempt to entice you to sell to them by sending a check for a significant sum of money. If you deposit the draft, it legally binds you to sell your minerals and prevents you from negotiating a better deal. Not offering fair market value. It’s not uncommon for unscrupulous buyers to float a price that’s far below fair market value, which is the value of your minerals dictated by the open market. It pays to do some research to determine what you should receive for the rights. Talk to others in your area who have already sold their rights and compare their offer to yours. No experience in your state. State laws and regulations regarding the sale of mineral rights vary widely. An out-of-state buyer may not understand the legal nuances, which can lead to potentially costly mistakes. How Much Do Mineral Rights Sell For? Buyers acquire mineral rights by the acre. The price per acre can change depending on whether the land is producing — oil and gas have already been extracted — or nonproducing — no existing or previous extractions. Other factors include location, current oil and gas prices, and well production levels. How to Sell Mineral Royalties If you own mineral royalties, the selling process is much the same as the rights to your minerals. Start by researching who buys mineral rights and royalties and locate potential buyers. Then, do your due diligence to ensure they’re reputable. Watch for out-of-state companies that make an immediate offer. In this scenario, it’s likely the buyer did little or no research and is attempting to sway you with an attractive price. In reality, the offer is probably far below fair market value. How to Sell Mineral Rights in Wyoming, Pennsylvania, Ohio & West Virginia If you’re located in one of these states, Sheridan-based Flat River Minerals is the best option for selling oil and gas mineral rights. As the only mineral rights acquisition company in Wyoming, we have a greater understanding of the rock, land and people than out-of-state buyers. Our in-house team of experienced geologists and drilling engineers uses best-in-class software platforms, resulting in highly accurate technical valuations. When you partner with Flat River Minerals, you’ll work with a company that adheres to a code of “cowboy ethics” — we build genuine relationships by doing what’s right, not what’s easy. Contact Flat River Minerals today to learn more about how to sell natural oil and gas mineral rights in West Virginia, Wyoming, Pennsylvania and Ohio. { "@context": "https://schema.org", "@type": "BlogPosting", "mainEntityOfPage": { "@type": "WebPage", "@id": "https://flatriverminerals.com/resources/blog/how-to-sell-mineral-rights-royalties/" }, "headline": "HOW TO SELL YOUR MINERAL RIGHTS OR ROYALTIES", "description": "If you own mineral rights, you may face a difficult decision — should you sell or keep them? The choice doesn’t always come down to dollars and cents, especially for long-term owners who consider the rights valuable family heirlooms. 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Start by researching who buys mineral rights and royalties and locate potential buyers. Then, do your due diligence to ensure they’re reputable. Watch for out-of-state companies that make an immediate offer. In this scenario, it’s likely the buyer did little or no research and is attempting to sway you with an attractive price. In reality, the offer is probably far below fair market value." } }] }