7 Things to Know about Selling Mineral Rights

Selling mineral rights and earning oil and gas royalties is becoming increasingly popular with landowners. In USA, more than a million leases selling mineral rights have been signed from 2001 to 2011 by landowners for royalties, and many more are landowners are likely to follow suit (Journal of Accountancy). Are you considering selling the mineral rights on your land and earning a royalty? Here are seven things you need to know:

Sell Mineral Rights for Royalties

Mineral rights can be sold by landowners for earning handsome royalties. A royalty in the oil and gas extraction context is a percentage of profit that the lessee shares with the land owner or lessor from the production of the land. It is the percent of profits generated by the minerals extracted from a landowner’s property.

Gas and Oil Royalty Yield Handsome Profit

 Selling mineral rights to oil and gas companies can help you earn a minimum royalty of 12.5 percentage. Great negotiation skills, a property’s value and intense competition amongst the various oil and gas companies may raise this percentage to 15 percent, 20 percent, 25 percent or more.

Share Only Profit and Not Expenses

When you sell mineral rights of your land to a company, you do not have to contribute anything to the production expenditures while still retaining your share in the profit. This means that whatever the lessee has to spend on the exploration or extraction, you, the owner, will not have to bear any of the cost.

Bonus Culminating into Royalty

You can also lease the mineral rights to your land for a short term. Landowners are also paid up front, a signing up bonus for leasing their property for a short-term period. This bonus culminates into royalties if the lessee company is able to find the oil, gas, minerals it is looking for.

Ownership Details

 Before selling mineral rights to your land, get its ownership details and prior leasing agreements (if any) in order from the courthouse. Get the paperwork in order related to your ownership such as deeds, trust, maps, wills, previous leases, etc, before seeking or responding to buyers.

Expenditures and Processing Fees

Oil and gas royalties come with taxes of different kinds. If you are weary of expenditures and processing fees that would incur during the leasing and royalty settlement process, you would be amazed to know that leasing company may even bear certain transaction fees.

Legal Help

When drawing out a contract with a mining company, get the necessary legal help. Hire an attorney, with expertise in mineral transactions, who can review the contract to make sure it is fair and just. He should be able to negotiate and educate you about the potential risks and implications in your and protection from damage on your property.

UniRoyalties, Ltd. is a professional company that can review and process your lease and help you capitalize on your assets. A qualified company like UniRoyalties, Ltd. takes the guesswork out of selling mineral rights of your land.