Q. I don’t understand all the details of selling my mineral rights or royalties. What do I do?
A. Contact us and we will explain the relevant terms and assist you.
Q. I have been approached by an oil company landman and he has offered to purchase my oil and gas mineral rights. What do I do? How do I know if this is a fair offer?
A. When a written offer to purchase your oil and gas mineral rights is presented to you, we recommend that you contact a local oil and gas attorney or landman and discuss the offer. You can also contact us and see if we are interested in making an offer.
Q. Should I consider selling my mineral rights or royalties?
A. Yes, in certain circumstances. Depending on the interest that you own, you should consider selling your mineral rights. When mineral rights properties are split through the estate process, (“fractionalization”) the result may be that each relative owns a very small portion of the title (ie. 1/5th of the title to 100 acres with your relatives holding the other 4/5ths). Situations like this may result in lengthy and complicated transactions with each relative receiving only a small portion of any proceeds from a leasing or sale transaction. At some point, the paperwork associated with owning small mineral rights interests may outweigh the value. Companies make it their business to acquire small interests from land owners and may offer you a significant premium for your interests.
Q. I inherited a small interest in some non-producing mineral rights and don’t know what to do next. I don’t think that they are leased out to anyone. Do they still have value?
A. Yes. With the rapid onset of horizontal drilling and multi-stage fracturing, new oil and gas wells are drilled every day in areas that were previously thought to be non-productive. With technology advancements, your lands could have significant value.
Q. I inherited a small interest in some revenue producing mineral rights and would like to know what these rights could be worth. I believe that they have been leased out to an oil company. I really don’t even know what I own in these lands but the checks are small and steady. What do you think?
A. Revenue producing mineral rights often have value that is primarily derived from the monthly royalty checks (“cash flow”) received by you as the lessor and mineral rights land owner. Your lands have probably been leased in the past and the lease is likely to remain in place until the producing wells are no longer viable. Depending on the production history of the well(s) on your lands and the future revenue potential of these wells and your property, we could pay you up to 48 times your monthly cash flow – maybe more – maybe less.
Q. Do you know what my mineral rights are worth?
A. Mineral rights can have a wide range of value. Value can be determined based on a number of factors including historical leasing activity, current royalty revenues (if any), past and potential drilling activity, industry conditions and area competition. Mineral rights, like any real estate, are finite. If you own mineral rights and royalties you own an asset. Ultimately, the market decides the value, but in many cases the market simply doesn’t know how to find you. Contact us and we will assist.
Q. What is a royalty financing and does your Company do these transactions?
A. Royalty financing is a business transaction whereby a royalty company, like ours, will create or “manufacture” a contractual royalty in and to certain producing and non-producing mineral lands. Royalty financings are a way for a producing Company to raise capital in return for granting a royalty to a royalty company.
Q. How large could a royalty financing be?
A. Up to $100MM CDN or US dollars. The size of a royalty financing is dependent on a number of factors, including current and future production, reserve values, operator competence and commodity prices.
Q. Where are your focus areas?
A. Our Company is focused on acquiring oil and gas mineral rights and royalties in Canada. We will consider USA properties, depending on the attributes of the property.
Contact us to discuss further questions and comments.