The “volume risk” associated with leasing your mineral rights

Posted on Monday, March 30th, 2015 at 4:01 pm    

With the country’s oil and natural gas boom, many mineral rights owners believe that leasing their rights would allow them to reap the most over the long term. However, leasing your mineral rights for royalties has its share of risks that could even be greater compared to the risks associated with selling your rights all together.

One known risk of leasing your mineral rights is the “volume risk.” While it is true that some wells live a long time, others might not. Over just a short time, those working on your land might find that the lease is not worth the cost of production. At this point, companies will often abandon the wells and your revenue will cease. However, if you choose to sell upfront, then you retain the larger initial payout and the risk of a low-yielding well shifts to the buyer.

To learn more about volume risks with leasing versus selling your mineral rights in Texas, our team of expert mineral rights brokers at The Mineral Auction can answer all of your queries. Contact us at (512) 698-2802 today to learn how to get the most out of your mineral rights.

Recent Mineral Rights Posts

Aug
31
Ownership of Mineral Rights: How do I know who owns the rights? How do I go about selling them?

If you are a property owner in an area that has precious resources like oil, gas, or minerals, you m... Read More

Jan
09
Who might buy your mineral rights

Selling mineral rights is much more different than selling most items or property. It goes further t... Read More

Jan
05
Cautions before selling mineral rights

The world of mineral rights is highly marketable, which is one of the reasons companies work hard ... Read More

Ready to get started? Call us today - (512) 698-2802