What Should I Be Concerned About When Selling Mineral Rights?
June 15, 2017
Owners of land with resources like oil and gas beneath the surface commonly sell their rights to those minerals to other parties interested in extracting them. Yet the sale of mineral rights should be approached very carefully.
Before you decide on selling your mineral rights, it is important to address a few lesser-known concerns to help you make the best decision. These concerns involve more than just how much money you can make selling mineral rights.
What Is It Really Worth - Today and Tomorrow?
One of the main things you should be concerned with when deciding on selling your mineral rights is the potential for higher valuation or extending your extracted value. Although you will receive immediate compensation for current value if you choose to sell now, you lose the ability to gain more income from them in the future. This could be done in the form of higher valuation or by leasing your rights instead of selling them.
Leasing to companies looking for land to explore can be a better option that results in greater income over time. Owners typically receive a signing bonus at the start of the lease and then earn royalties from any minerals produced. Leasing means you can make money while maintaining ownership, giving you the option of selling mineral rights at a later date.
Family Estate Planning
Considering that your rights may be worth a lot more tomorrow than they are today, have you considered handing them down to your heirs? Mineral rights are considered property and as such, can be handed down as part of your estate to future generations.
Whether land is producing or not, your loved ones can benefit if you avoid the sale of mineral rights and simply pass on your interests. Your heirs will have the ability to lease rights to gain royalties in the future or sell if they desire.
Another significant consideration to make before selling your mineral rights is the loss of control of the ground surface. As the owner of resources under the surface, you also control the surface. This means anyone who explores on your land must do it as you direct. You can choose to use your land for other purposes such as grazing animals, planting, or even building on it.
After the sale of mineral rights, you no longer have such control. Even though you own the surface land, the owner of the mineral rights retains the ability to explore or drill as needed, regardless of how you wish to use the property. Once again, a better option may be to forego selling mineral rights and consider leasing instead to earn while retaining control of your land surface.
If you are thinking of selling your mineral rights, take some time to consider the important points above before selling them. Leasing and other creative options could be a more lucrative choice for both you and your family rather than the sale of the mineral rights. Learn how to benefit without actually selling mineral rights to decide whether doing so is in your best interest!
Thinking Of Selling Mineral Rights In West Texas?
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