Reduced Oil / Gas / Mineral Royalty Payments
You’ve probably seen the news: Crude Oil prices have dropped by half their value in less than a year. Oil was traded for $100+ per barrel in July 2014, and then began to slip. To $80-85 per barrel in October. $55-60 per barrel in December. And now currently hovering around $45-50 per barrel.
With lower commodity prices come lower royalty payments for mineral owners. And, often in these times, an oil company may “shut-in” a producing well if they cannot afford to operate the well, or if they hope prices will improve in the future.
We have been approached by many royalty owners who are concerned about their decreasing payments, and have considered selling their interests. At Hilltop Royalties, we never advise an owner to sell their interest. However, we also realize that many people have become accustomed to a certain level of income from their royalties, and wish to maintain their lifestyle. Or, their current life situation necessitates more money now than what they are receiving.
There are many mineral buyers on the internet, all who claim to work in your interest. They don’t. They may have cold-called or mailed you, offering top dollar. They don’t. We estimate the majority of them to be “flippers”, who want to buy as much of your interest as they can, for as little as possible, and then “flip” the minerals to a larger investment group, pocketing the profit. Please contact us first before talking to a mineral buyer. You have many options.
Instead of selling all of your interest, consider some alternatives:
Sell only a fraction of what you own, to meet your immediate financial goal.
Sell for a fixed period of time. For example, you can sell your minerals for a 10 year term, or for the life of a current oil and gas lease. In the end, you will still own the mineral rights.
Sell only a specific “strata”. Oil and gas is typically produced from one specific “strata” or geographic layer of the earth. However, there could be oil and gas lying above or below that layer.
Sell only the royalty interest, keeping the right to lease in the future. You determine if and on what terms your minerals are leased in the future, and can collect the bonus payment.
These are but a few examples. Every client’s needs are different, and we listen to you to determine what is best for you.
If you absolutely need to sell your minerals, please contact us first. We work with a large network of professional mineral buying companies, high-net-worth investors, and private-equity companies to secure the best deal for you.
Hilltop Royalties, LLC is not a law firm, and we do not create an attorney/client relationship with any client. Many of our clients have their own attorneys, and we will happily work with them, or refer you to a reputable attorney if you desire legal advice.