How To Find The Best Mineral Rights Buying Company
Finding a mineral rights buyer is pretty easy. A quick google search about any “Mineral Rights Buying Company in North Dakota” leads you to many mineral rights buyers. The challenging part is knowing which royalty buyer you should trust. For every legitimate mineral rights buyer, there are a lot more who will take advantage of you.
Before you sell mineral rights, it helps to understand these buyers a little more.
Why are they buying from you if you’re selling your mineral rights? There are two reasons why someone may do this:
Flipping: Many organizations purchase mineral rights to resell them for a quick profit. This is not your ideal buyer since if they can locate someone at a higher price, why shouldn’t you be getting the biggest pay?
Royalty Purchasers Want Long-Term Commitment: Legitimate royalty purchasers are seeking long-term commitment. They buy mineral rights intending to retain them for 10, 20, or even 30 years. These mineral rights buyers will acquire a variety of rights as time goes on.
When drilling commences and oil and gas royalties are produced, their investment over time pays off. Buying numerous mineral rights provides diversification to their portfolio. These are the mineral rights owners who will offer you the highest rate of return.
Letters in the Mail Aren’t Always the Safest Option.
Playing Russian roulette with letters in the mail is similar to rolling dice! Some real firms send mailshots in the mailbox. However, the majority of the letters you get will be lowball offers. Teaser offers are also prevalent among companies. They’ll claim to pay “upon” a rate per acre or assume a 25% royalty percentage. If you contact them, the price is seldom what it seems like it would be.
Letters in the mailbox can provide you an indication of what value might be, but take them with a grain of salt.
Mineral rights buyers are masters at generating a sense of urgency. They’ll provide you with an unverified deadline for your offer. These deadlines are frequently only days long, allowing you just a few days to make up your mind. When selling mineral rights that have been in your family for decades, please don’t rush through it! A real buyer will allow you enough time to make a decision.
About Purchase and Sale Agreements (PSA).
The PSA contains the terms of the offer. Are you familiar with the difference between a net mineral acre and a net royalty acre? Do you know how long it takes to title property in your area? PSA’s sometimes include language that will cost you money, such as mineral rights buyer slip wording.
Someone on your side who understands these contracts is crucial. Imagine attempting to sell a property without an agent and having the buyer complete all of the paperwork. Mineral rights owners do this all of the time, and they are frequently fooled.
Trust a Diligent Process.
Mineral rights buyers who have done their homework and are ready to make a transaction will go through the following steps, which are intended to be completed in order:
- Geology and engineering review.
- Production analysis.
- ROI analysis.
- Lease & operator review.
- Royalty statement analysis and future cash flow estimates.
- Title runs.
- Outgoing conveyance review.
Find the Most Prepared Mineral Rights Buyer.
Unfortunately, there are several methods to be taken advantage of when selling mineral rights. There are several genuine mineral purchasers out there, but many shady flippers and mineral rights buyers are also there. They’ll go to any length to take advantage of you and get a better bargain. Preying on mineral rights owners who aren’t familiar with the process.
Getting Smart About Your Mineral Rights.
Mineral rights purchasing firms, such as Blue Flame Minerals, are particularly focused on comprehending all of the variables associated with the value of your asset: market competition, commodity pricing, future drilling, operator risks, and geology and title. These mineral rights buying companies won’t let complex mineral evaluations affect your offer by a few minor adjustments.