Selling Mineral Rights & Royalties
Caddo Minerals is one of the country’s premier, most trusted buyers of Mineral Rights and Royalties. We buy Leased, Un-Leased, Producing and Non-Producing Mineral Rights, Royalties, Overriding Interests and Working Interests. Caddo is the fastest, easiest and most efficient way to Liquidate your energy ownership. We pay Top Dollar for your Mineral Rights and Royalties and we close quickly. Ask us for a quick, no-hassle evaluation of your Mineral Rights, Royalties or Overriding Interest today!
Contact us for a FREE consultation and evaluation of your Mineral Rights and/or Royalty ownership. Call us at – 877-620-7717. You can also fill out the form under the “Contact” tab or send us an email at firstname.lastname@example.org.
Once we receive your email or phone call, we’ll gather some more information from you regarding your property. Once we have enough information, we’ll give you a quote. In addition to our quote, we’ll give you a detailed analysis on how we valued your property and we’ll help you work through the decision to sell or not to sell your minerals or royalty.
Accept our offer and we’ll close within a few weeks! We’ll email or overnight you the agreements, and we’ll send you a cashiers check or wire money directly into your bank account. We NEVER use bank drafts!
Deciding to Sell your Mineral Rights or Royalty Interest
People sell their mineral rights or royalty interests for all kinds of reasons. We’re not financial advisers and we don’t know your particular needs, but here are some reasons people have chosen to sell their mineral rights or royalty interest to Caddo:
- Manage Risk and Uncertainty. Your mineral rights or royalty interest might bring in more money in the long-run if you kept them instead of selling them to us (that’s why we want to buy them from you!). But that’s not a sure thing. The value of your mineral rights or royalty interest could fall due to things like low oil and gas prices, weak results that may condemn acreage, incompetent operators, slow development, or drainage. Some people prefer the guarantee of cash today.
- Turn a Revenue Strem into a Lump-Sum Cash Payment. If they are producing, your mineral rights or royalty interest will bring you a stream of revenue, month-by-month. Some people like that. But others would prefer a lump-sum cash payment to fund retirement, pay for college, pay off a mortgage, or just diversify an investment portfolio.
- Tax Reasons. We’re not tax lawyers or accountants, but we know that sometimes the time is right to sell property for tax reasons (e.g., to generate favorable capital gains tax treatment, to help plan your estate, or just to offset with a big deduction). Talk to your tax lawyer or accountant-and then talk to us!
- Estate Settlement. Dividing up small mineral or royalty interests among heirs can create management headaches. Selling the minerals allows the estate to divide up cash for easy distribution to heirs.
No More Management Headaches. Managing your mineral rights or royalty interest takes time and money (e.g., tracking checks, overseeing well operators, computing taxes). Those are management headaches you don’t need to worry about if you sell.
How we value Mineral Rights
How does Caddo come up with a price for my Mineral Rights or Royalty? It really depends on your property. There are 3 basic scenarios with three very different valuation processes.
Producing Property – If your property is producing, and you’re receiving royalty checks from an operator, then it is pretty simple to value your mineral rights. In this case, we do some simple research to figure out what stage of production your property is in. Depending on where your property is (formation and/or play), there is a standard decline rate which all wells experience. This means that your second check will be less than your first, and your third will be less than your second. Typically wells experience a rapid decline rate within the first year. After the first year, the decline rate slowly levels off. Decline rates are unique to different plays (like the Haynesville or Eagle Ford Shales), but are similar within the plays, which means that your decline rate is going to be almost identical to your neighbor’s. Once we find out where your property is on the decline curve, we will be able to come up with an offer based on a multiple of your current cash flow. This could be anywhere between 20 and 75 times your current months royalty check.
Leased but NOT Producing – If your mineral rights are leased, but not currently producing, it is a bit more difficult to value, but still fairly straightforward. In this case, an Oil and Gas company has leased the rights to produce your mineral rights, but has yet to begin production. There are a variety of subset situations within this field (rig on location, drilling has begun, etc…), but the fact is that the property still has some un-known factors. At this point, we look at the known factors including the lessee (company leasing your minerals), neighboring production, and other factors. We will come up with a value based on how certain we are that the property will ultimately produce, and how much we could expect it to produce if it goes into production.
NOT Leased – Purchasing a property that is not yet leased can be a really risky endeavor for us, and the valuation is totally property specific. However, selling your un-leased property can still yield a nice return for you and make a lot of sense. We are a well diversified investor, which means we can take a risk here and there on un-leased properties. While an un-leased property may be risky for us, it is extraordinarily risky for you when you consider opportunity costs. If you have the option to sell your un-leased mineral rights, you should really consider taking it. This is the most un-certain of the three situations, so don’t let the opportunity pass you by when we come knocking at your door.