MINERAL OWNERS
Focused on discovering the greatest opportunities and maximum value for our clients’ mineral and royalty interests.
It is important for you to understand the facts surrounding your mineral and royalty interests. At Retama, we have a team of professionals here to help you understand all your options and what could be the best course of action for you.
WHAT ARE MINERAL RIGHTS AND ROYALTIES?
Mineral rights are the legal interest in the subsurface of a property. Your mineral rights give you the right to explore, develop, and produce any oil, gas, and/or other minerals that lie below the surface of your property. In some cases, the mineral rights are separated from the surface rights, meaning that one person may own the surface of real property while another owns the minerals beneath the surface.
Royalties are payment to the owner of mineral rights for the privilege of extracting the mineral (oil and/or gas) from the ground based on a mineral lease agreement. The royalty payment is typically based on a portion of earnings from the production of the minerals, and varies depending on the type of mineral and the market conditions.
DO I HAVE TO SELL ALL MY INTERESTS?
No. Many acquisition firms are only interested if they can buy all of an owners’ mineral or royalty interests. Not Retama. We understand the hassles that can come with mineral ownership and welcome the opportunity to purchase just a portion of an owner’s interests, effectively serving as a partner.
WHY SHOULD I SELL MY MINERAL RIGHTS?
Mineral owners sell for all different reasons, some of the most common are:
Less Hassle
Retama has the personnel and technical experts to bear the burden of day-to-day management that can get expensive and time-consuming.
Money
Mineral rights, royalty, and royalty income all have value and can be sold or leased in exchange for cash. A lump sum payment is often more impactful than monthly royalty checks.
Tax Benefits
There are tax advantages to selling your minerals, including 1031 exchanges and Long-Term Capital Gain Taxation.
Risk Reduction
Selling your minerals allows you to secure the current value of your interest. It alleviates the various risks associated with ownership including the risk of declining production and changing commodity prices, and the risk of a dry hole or a marginal well.
Estate Management
In the event of the mineral owner’s death, it is often easier to liquidate assets than to probate an estate and manage those assets. Should the individual hold properties in several states, the estate will have to be probated in each state which can come at significant cost.