A guide for the buyers of mineral royalties To begin with, let us simplify the meaning of oil and gas royalties. It refers to a land, an estate, or an oil reserve that is purchased by a buyer as a form of investments in order to make longterm investments from oil and gas markets. Purchasing these mineral royalties is a perfect investment strategy. It covers high recompense and low risk. Usually the landowner sells their piece of land to the companies in order to extract the minerals. If they succeed in finding them, the oil company pays you a percentage of its profits as a form of royalties.
Method 1. Establish a royalty trust: a royalty trust means you have the legal right to collect oil and gas reserve royalties. The income in royalty trusts usually comes from the actual sale of the oil and mineral rights, as well as the investor’s own business investment. This income is used to finance the business operating expenses and the remainder is distributed among the beneficiary holder (this could be an individual or a group of investors.)
2. Once you have collected sufficient funds and have succeeded in building up a trust, move on to look for a piece of land, an estate or an oil reserve. Seek some legal advice. Data vendors usually have information regarding the people who are willing to sell their mineral rights. Contact a geologist. They have different techniques to find oil reserves underneath. If they can identify: source, reservoir, seal, traps and timing, you need to be sure there’s oil underneath. Now, narrow down your choices, and have a look at your created list.
3. Now is the time to make an appropriate offer. Go and meet the seller as a buyer of mineral rights and show them a competitive yet reasonable offer. Mostly, you will come in contact with a person who is the owner of the land instead of another business. In order to bring up a perfect deal you need market intelligence, proper research and data analysis to fix the amount of money you need in order to purchase a piece of land or just its mineral rights. Usually before you meet the land owner in person, you need to send a letter to them with a bank draft with information regarding your quotations.
4. Remember, not every offer you make will result in you getting mineral royalties. So, just close the deal. Only once you hear back from the landowner or a mineral rights owner you can be sure that this process will surely precede. Now is the time for some serious negotiations. Do some reviewing and expert screenings of the property before you close the deal!
5. Now file the purchase paper in the appropriate courthouse with the help of some legal advice. Keep in mind to contact more than one oil company for the resale or lease of royalties. It takes around 3 months to see your first royalty check from your resale or lease on the mineral rights. But, the question is why would someone want to sell their mineral royalties to you? There are many advantages of doing that. Let us have a look at some of the benefits of selling oil royalties
1. Receive a lump of cash today: if you are short on cash and are not able to arrange some cash instantly, why not think about selling your mineral royalties? Believe me, there are a lot of buyers of mineral royalties around, looking for such opportunities. 2. Depleting assets: we all know that the natural resources will deplete sooner or later. So, why not benefit now with a better cash opportunity? 3. Eliminate your paperwork: stop worrying about the hassles of tax payments and sell your mineral royalties. No more paperwork, no more property tax statements, and no more record keeping. 4. Do your heirs a favor: now is the time to eradicate the hassles of hiring a lawyer to probate your interests and draft of your property to your heirs. So, if you are interested in purchasing the mineral royalties from a company, go ahead. You will find many people willing to sell their rights to you. Just keep in mind to do a thorough research, before sending your offer to them. Have a look at each one of the interested individual company and send them your quotations. You never know who will contact you back. Make an appropriate offer. Do proper research before finalizing the amount. You need to know that these procedures should not be taken lightly. Get some legal advice and come out with the best deal to offer them. https://vimeo.com/128229595