Selling vs Leasing: advantages and disadvantages

Posted on Wednesday, November 25th, 2015 at 8:15 pm    

After you come to learn that minerals have been located on your property, you may want to consider selling or leasing those mineral rights. Here are a few key points for both selling and leasing that may help you determine which will be right for you.

Selling your mineral rights will afford you solid and assured benefits in the form of a fixed payment. You will not have to stress over rising or decreasing values. On the other hand, you may give up your rights to receive royalty payments from the mining and selling of the materials on your property. Should the value of the minerals go up, your payment will not change to reflect this.

Leasing your mineral rights usually involves creating a contract that outlines the rights both you and the oil or gas company with which you make the deal will enjoy, including the terms of the royalty payments you will receive. When leasing your mineral rights, you will receive compensation from a company just as you would were you to sell them. Leasing, however, involves an arrangement of monthly payments that only last the predetermined amount of time. While this option affords you the chance to earn more should the value of your mineral increase, it also poses the risk of decreased payments when values decrease.

If you are considering selling or leasing your mineral rights, it is best to consult with our mineral rights specialists at The Mineral Auction in order to discuss which option will work best for you. Call us today at (512) 698-2802 to speak to a representative.

Why people sell their mineral rights: tax savings

Posted on Friday, August 7th, 2015 at 4:04 pm    

More and more property owners find it appealing to sell their mineral rights rather than lease them. Reduced financial risks, liquidity, and today’s natural gas boom are just among the many reasons why people choose to sell their mineral rights upfront. But apart from these, people are also choosing to sell their mineral rights due to tax savings.

Leases are considered regular income. As such, when you lease your mineral rights, any amount you regularly receive will be subjected to tax. However, when you sell your mineral rights straightaway, you could only be subjected to capital gains tax, which is a one-time tax you pay after realizing a profit from the sale of your rights.

Tax savings are just among the many benefits of selling your mineral rights. To learn more about selling your mineral rights in Texas, speak with our team of mineral rights brokers at The Mineral Auction by calling (512) 698-2802 today.

Weather is a risk to be considered by oil players

Posted on Friday, July 17th, 2015 at 5:53 pm    

Although oil and exploration companies are always subject to the effects of volatile market prices and an empty well, they should also take into consideration another risk that can profoundly affect the profitability of their ventures – weather.

Over the years, global warming has caused many companies to experience earnings fluctuations due to erratic weather. For instance, a summer that is unpredictably cooler may cause a decline in demand for energy for space cooling. Warmer winter months, on the other hand, may decrease energy demand for heating. These variations may cause price instability, which could impact a company’s bottom line.

One of the advantages of selling your mineral rights is that you are freeing yourself up from these risks and are dropping them into the hands of the players who have the capital to survive great losses. To learn more about selling your mineral rights in Texas, speak with our team of brokers at The Mineral Auction by calling (512) 698-2802 today.

Are you really prepared to lease your mineral rights?

Posted on Wednesday, July 8th, 2015 at 6:54 pm    

If you hold on to your mineral rights by leasing them, you are engaging in a business that has its own unique dangers. The question is, are you really prepared to take on the challenges?

Volatile markets, strict federal and state regulations, and the likelihood of experiencing a dry well are just among the myriad of different risks oil and natural gas players face every day. Fortunately, these companies have the resources to tackle each of these risks without much damaging impact. For instance, oil exploration companies have the capital to effortlessly spread the risk of dry wells over large land areas, sometimes even across several states and countries.

By selling your mineral rights upfront, you are sparing yourself from the possible harm of engaging in a venture that won’t pay off. Speak with our team of mineral rights brokers at The Mineral Auction by calling (512) 698-2802 today to learn more about selling your mineral rights today.

Enterprise to buy Reliance and Pioneer’s EFS Midstream

Posted on Wednesday, June 10th, 2015 at 2:19 pm    

Houston-based midstream energy services provider Enterprise Products Partners LP has announced it will purchase the Eagle Ford Shale Midstream system (EFS Midstream) of Dallas-based Reliance Industries Ltd. and Mumbai-based Pioneer Natural Resources Co. for $2.15 billion, Bloomberg Business reported on June 1.

According to the agreement, Enterprise will pay the sellers in two installments. $1.15 billion will be paid upon the deal’s closure, while the remaining $1 billion will be paid 12 months after the closing. EFS Midstream is a provider of services in the petroleum industry’s midstream section, which comprises transportation, storage, and marketing of petroleum products. EFS Midstream is currently operating in the oil-rich Eagle Ford region.

The rising number of petroleum industry players who want to expand their business portfolio indicates how promising the energy sector is today and in the near future. If you are a mineral rights owner in Texas, selling your rights upfront would enable you to benefit from this current energy boom. To learn more about selling your mineral rights, consult with our team of mineral rights broker at The Mineral Auction by calling (512) 698-2802 today.

America’s drilling scene slowly recovering from the bust

Posted on Tuesday, May 26th, 2015 at 2:42 pm    

Although the past months have been rough for the oil and gas industry due to plummeting prices of oil, economists say the country’s oil drilling boom is slowly beginning to come back to life, Bloomberg Business reported on May 9.

The CEO of energy data provider Drillinginfo said the country’s rig count may increase to up to 1,300 if the prices of oil rise above $70 per barrel. The Permian Basin in Texas is projected to be the first area to recover from the bust. This is due to the multi-stacked production zones that allow players to drill oil at varying depths through a single well.

Evidence here and there suggests that the country’s drilling boom is not yet over, and selling your mineral rights upfront would enable you to get the most out of it without having to worry about fluctuating oil prices or the threat of a bust. To learn more about selling your mineral rights, consult with our mineral rights broker at The Mineral Auction by calling (512) 698-2802 today.

Selling your mineral rights could mean financial peace of mind

Posted on Tuesday, May 5th, 2015 at 4:28 pm    

In today’s global economy, investing in the oil and natural gas sector poses two great dangers: the danger of fluctuating oil and natural gas prices, and the danger of a low-yielding well. As such, many mineral rights owners choose to sell their properties upfront to shift these risks to the buyers, who are more agile in dealing with the sector’s volatility.

Another thing that compels mineral rights owners to sell their mineral rights is the chance to invest in industries that are relatively stable, such as ecommerce, travel, and building and maintenance. Being paid upfront also gives the mineral rights sellers the benefit of capital, which they may then reinvest in another industry or their own financial security.

By selling your mineral rights, you are setting yourself free from any possible financial risks associated with keeping leases. Sell your mineral rights today with the help of our team of mineral rights brokers at The Mineral Auction and get the financial peace of mind you deserve. Call us at (512) 698-2802 today.

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.

Hillcrest’s production rises after Gulfsands acquisition

Posted on Tuesday, January 27th, 2015 at 3:56 pm    

Hillcrest Resources Ltd. announced that on December 19, it completed the purchase of Texas-based Gulfsands Petroleum USA, according to a press statement published by the Marketwatch on January 20.

The purchase caused Hillcrest’s production to increase by approximately 171 barrels of oil per day (bopd) and 420 thousand cubic feet of gas per day. The company also said that apart from increased oil and gas production, it identified four new infill drilling locations and also continued their well re-completion and maintenance projects.

The newly-sealed deal also relocates Hillcrest’s main office to Houston,TX. According to Hillcrest CEO and Chairman Don Currie, the change of address would move their headquarters to a location nearer to their production facilities and would also streamline administrative responsibilities and operations.

Major players in the oil and gas industry are switching to their newest location of interest – Texas. If you want to take part in this economic boom by selling your mineral rights, speak with our team of mineral rights brokers at The Mineral Auction by calling (512) 698-2802 today.

American Energy poised to buy more mineral rights

Posted on Thursday, December 4th, 2014 at 7:42 pm    

American Energy Partners announced on Monday that amid its plans of entering into pipeline partnerships, acquiring oil-producing assets, and possible initial public offerings, the company is still allocating millions of dollars’ worth of funding to purchase mineral rights in some of the country’s most prolific oil-producing regions, Fuelfix reported on Tuesday, December 2.

The company, which is owned by former Chesapeake CEO Aubrey McClendon, said it will set aside $500 million from equity commitments to buy 28,000 net mineral acres and secure 29,000 acres in royalty interests. Among the formations American Energy Partners plans to invest in is the Permian Basin, one of the country’s richest oilfields located in West Texas.

Many players are still eager to secure as many mineral rights as they can despite factors that threaten the overall health of the energy sector, such as pressure over fracking bans and dwindling oil prices. This enthusiasm proves that selling your mineral rights today would help you make the most out of this energy boom. To learn more about selling your mineral rights in Texas, speak with our team of brokers at The Mineral Auction by calling (512) 698-2802 today.

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