The decline in commodity prices has made many mineral owners consider selling their mineral and royalty interests as the timeline for a rebound is uncertain. Unfortunately, many of these owners are not well-versed in the methods and resources available that allow them to fully maximize the value of their transaction. Even worse, some mineral owners receive and accept unsolicited purchase offers in the mail for their minerals that represent a small fraction of what they are actually worth, only to realize years down the road that selling for that price was a huge mistake. The following tips for maximizing the value of oil and gas minerals and royalties in a sale are geared towards mineral and royalty owners with property located in Texas:
1. Consider selling just a portion of your minerals. One thing that is certain about a mineral sale is that when the minerals have been sold, they are gone forever. What many mineral owners don’t realize is that you can sell just a portion of your minerals, such as 50%, 25% or any other amount, allowing you to still keep an interest in the property.
2. Consult the online records of the Texas Railroad Commission (the “RRC”) prior to selling. The RRC is the governing body for oil and gas activities in the State of Texas, and provides an extensive amount of constantly updated data about the oil and gas activity on tracts throughout the state. The easiest and most effective tool that they provide, which also happens to be free, is their “GIS Viewer” which allows you to see what the production and permitting activity looks like around your area. Having knowledge of what the production and permitting activity is around your tract is the first step to being informed when putting your minerals on the auction block.
3. Do not take the first offer you are given without exploring other options! While this may seem like common sense, it is tempting for a lot of people to accept the first offer when they are presented with a large sum of money for what they previously thought had minimal value associated with it.
4. Do not be pressured by “take it now or risk losing it” offers. If a mineral buyer wants your property today, they’ll want it tomorrow, two weeks from now…these are long term investments for many buyers and the arm twisting tactic of take it or leave it offers is simply that, a tactic. It is reasonable to request two weeks to evaluate a purchase offer.
To find out more about Hilltop Royalties, please visit our website at www.hilltoproyalties.com or send us an email at firstname.lastname@example.org. We are also available by phone 7 days a week at 214-494-1024.