Never Sell Mineral Rights? Reasons to Hold and Reasons to Sell

As a mineral rights owner, you’ve probably heard before that you should never sell your rights. While there might be some reasons not to sell, current market factors, oil and gas prices, and potential personal reasons can all combine together to make selling the best option for you.

If you are considering selling mineral assets but aren’t sure if it’s the right decision, keep reading to learn more from mineral rights experts.

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Why They Say Never Sell Mineral Rights

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When it comes to justifications for not selling mineral rights, each person might give you a slightly different answer, but it usually all boils down to the same thing: some believe that holding mineral rights brings guaranteed generational wealth that can be passed down. While there is some amount of truth to this, it’s an oversimplification of what you should do if you own mineral rights.

Another reason some people worry about selling their mineral rights is the limited control retained by surface owners. However, while surface rights owners don’t have control over the development of the minerals underground, they do have a say over how that development impacts the surface.

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Reasons Not to Sell Your Mineral Rights

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There are some good reasons why you might not want to sell your rights as a mineral owner. Some factors that might make it a good idea to hold onto your mineral interests include:

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• It takes no effort not to sell
• The mineral rights value generally increases over time
• There’s no liability risk to not selling
• You can always choose to sell later
• You can lease mineral rights for royalty interest instead

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Reasons to Consider Selling Your Mineral Rights

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There are many reasons to consider selling in today’s oil and gas market. Buyers in the oil and gas industry are making higher offers than before, and it may be easier than ever for most mineral owners to get offers for fair market value.

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There may also be additional, more personal reasons that make selling rights the smart choice for mineral owners, including:

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• Increase liquidity
• Reduce assets for estate planning or divorce
• Stop receiving varying amounts in royalty interests
• Diversify your assets
• Reduce risk in your portfolio
• Resolve family disputes
• Receive a fixed cash payment rather than varying amounts from potential royalty streams

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These are just a few of the personal reasons behind many mineral owners' decisions to sell their rights. There may be other personal factors that can influence your decision to sell or hold your mineral rights.

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Keep in mind that just because you own and lease your mineral rights, that doesn’t necessarily mean you will begin earning mineral royalties. The mineral rights buyer may decide not to develop the deposit on your property. 

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Why Are Mineral Buyers Making High Offers on Mineral Assets?

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One of the biggest reasons to consider selling your mineral rights is the high number of quality buyers ready to make a fair offer on mineral interest. Market factors have pushed mineral buyers to make higher offers than ever before. Some of these market factors include:

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• Buyers Expect Future Price Increases – Oil and gas companies have an optimistic view of the future of gas prices, meaning they’re willing to pay more than they once were.
• Future Drilling Opportunities – The potential for future horizontal drilling for shale deposits has companies making higher offers on wells that might not be earning much in oil and gas royalties.
• Production Increases – In the last decade, external forces have driven companies to bump up oil and gas production, meaning they expect to get more for their money today than before.
• Technology Advances – Thanks to advancing technology, companies can make more accurate forecasts for the production of a given well, allowing them to avoid making bets on unprofitable wells.

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How to Profit From Mineral Rights Without Selling

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If you own mineral rights on a property, there are three primary ways to make a profit: by selling the rights, leasing the rights, or developing the property yourself. We’ve already discussed the benefits of selling, but you can check out some more information about leasing or developing your mineral rights:

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• Leasing Mineral Rights – By leasing your mineral rights, you’ll retain ownership of the rights while still being able to make a profit through royalty income. You’ll be able to negotiate favorable terms for the lease agreement, allowing you to continue to make a profit over a longer period of time. However, short-term royalty interest is drastically less than the amount you’d make by selling. Also, remember that leasing your rights doesn’t guarantee you’ll make royalties.
• Developing Mineral Rights – Next, you can always develop your mineral rights yourself, but there are reasons to consider other options. Mineral extraction and production take considerable expertise, equipment, manpower, and overall investment. You may not be able to produce enough from your land to make the investment worthwhile.

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How Much Is Your Mineral Rights Value?

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So, what’s a fair price for mineral rights? There’s no simple answer.  Instead, the value of your mineral rights will depend on many different factors, such as:

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• Market trends
• Oil prices
• The price of natural gas
• Whether the mineral is producing or non-producing
• The production history
• The location
• The operator
• Whether or not the buyer decides to develop the mineral estate

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To determine a fair price for your mineral rights, your best option is to speak to a mineral rights expert like those here at Auction Mineral Rights. We can help you determine your future oil potential and how to make more money from your mineral estate.

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How to Sell Your Mineral Rights for Maximum Value

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While all of the factors above can have an impact on the value of your mineral rights, you can also play a role in increasing the value of the offers you receive for your rights. You can maximize the sale price for your mineral rights by following the steps below:

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• Get Expert Help – Work with an experienced mineral rights broker or mineral rights auction house to maximize your potential offers.
• Negotiate Higher Offers – Hold a strong position in negotiations by having a solid understanding of the value of your mineral rights.
• Market Your Mineral Rights – Marketing can play a big role in increasing the value of offers you receive.
• Consider Multiple Offers – Mineral rights sales often involve offers from more than one party. Consider your options to receive a higher offer.

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Who Might Make a Purchase Offer for My Mineral Rights?

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We’ve discussed how to decide whether or not selling mineral rights is right for you, but we haven’t yet considered who might buy these rights. There are many different parties that might be mineral buyers, and you can learn about some below:

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• Oil and gas exploration companies
• Independent operators
• Mining companies
• Investment firms
• Private equity firms
• Integrated oil and gas operators
• Production companies
• Land developers
• Royalty companies

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Make the Most of Your Mineral Rights With Auction Mineral Rights

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If you’re considering selling mineral rights, you’ve come to the right place. Here at Auction Mineral Rights, we pride ourselves on helping mineral owners make the most out of their mineral interests by selling those interests in an auction of qualified buyers. We can help you get the best price possible for your rights.

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Don’t sell your rights without help from an expert. Your valuable mineral rights deserve a fair offer, and we’ll make sure you get it. Get in touch with Auction Mineral Rights today to start the journey to maximum profits.

Want to maximize profits from your mineral or oil and gas rights? Get in touch with Auction Mineral Rights today.

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