It Pays to Learn About Oil Royalties, Literally! Oil royalties have become a popular way of earning income from land without selling it. People have started realizing the value of the natural resources in their land and the fact that they can capitalize their land and earn more than the total value of the property without even selling it. Not only are landowners benefiting from this knowledge and realization but oil companies are also benefiting because they hardly have to go through the hassle of finding oil now. Most landowners who have oil reserves reach out to them, which make their job of finding oil easier and therefore less expensive. This win-win situation is great for both the parties as well as the economy. For all those who are still wondering how to buy oil royalties, the process is not too complicated and fairly simple. One can always advertise the need to purchase oil royalties and landowners with oil reserves will automatically get in touch. It is always advised to get a lawyer or a legal expert involved so the contract is smooth and does not cause any problems for either party. The terms of the contract vary and therefore can be negotiated according the quality and quantity of the oil reserves. An oil royalty is the best way because it promises a percentage to the landowner, which means if the quantity is less than anticipated then the buyer of oil royalties will not have to suffer. However, even though oil royalties have become more popular than ever in today’s time, it is calculated that around 99% people are not aware of the business of oil royalties. There could be many among these 99% people who have oil reserves in their land and are missing out on a major capital that they can earn legally and lawfully.
So lets begin with the basics. The term royalty means interest. Therefore, an oil royalty is an amount of interest that the landowner collects from the person who buys the oil. The responsibility of drilling the property, extracting the oil and refining it lies on the buyer. The buyer usually has two choices; either he can or she can lease the interest or buy it by paying the entire sum at the beginning of the contract. While selling the royalty completely may seem like an attractive option to the seller, it is always advised to lease an oil royalty because that promises regular payments every month or so.
There are several reasons why landowners must lease their oil royalties and the biggest reason is the fact that it is a great way to earn a huge sum of capital without letting go of the land. When the lease is over, one can always sell the lease again or use the land for some other purpose that can generate further capital. Moreover, oil companies are on the lookout for land with oil reserves and therefore willing to meet landowners. They not only offer great prices for the oil royalty but also do everything needed to extract the oil, which means there is no responsibility on the landowner. So, if you are still wondering how to sell your oil royalties, look it up and do not wait any further.