Mineral Rights or Royalty for Sale?
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
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 to your right or send us an
email at email@example.com.
Once we recieve 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 addtion 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
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!
Reasons to Sell your Mineral Rights or Royalty
Guaranteed Cash Today. Selling your mineral
rights or royalty is a simple exchange of cash today for un-certain
future cash flow. If you are own producing royalties, Caddo
will buy your royalties for many years of potential cash flow.
Let us worry about the taxes, keeping the operator honest and
the risks of future production and commodity prices. If your
property is not producing, we'll give you cash for your mineral
rights. With non-producing minerals there is substantial risk
that the property will never produce any royalty income.
Caddo is willing to take on this risk. You might want
the guarantee of cash today.
Investment Diversification. Selling
your minerals or royalty creates liquidity. Retaining all of your
mineral interest creates a risky, less diversified invstment
Lump Sum Cash Payment. Put your lump sum
cash payment to work. Our clients have used this money to
fund retirement, pay for their children's college education or to
pay off their mortgage or other high interest loans Lump sum
payments are often more impactful and better used than small
monthly royalty checks which are easily frittered away.
No More Management.Royalty checks can create
work. Keeping up with your checks can be an organizational
disaster. Well operators are known to take advantage of royalty
owners and royalties can complicate taxes.
Tax Advantages. Selling minerals can
generate favorable capital gains tax treatment, which in some cases
can reduce income taxes.
Estate Settlement. Dividing up small mineral
interests among heirs can create management headaches for the
heirs. Selling the minerals allows the Estate to divide up cash,
which is much more easier for the heirs.
The Decision to Sell Mineral Rights
How do I know when I should sell my Mineral Rights?
This is a question we get all the time, and it is a
tough one to answer. One of the most common mistakes is
taking the position that one should never sell mineral rights or
royalty ownership. Mineral Rights, Royalties and any other
kind of real estate should be looked at strictly as an investment.
If your investment portfolio is "overweight" towards real
estate (mineral rights, royalties, etc...), then you should
consider diversifying and selling all or part of your minerals.
How to decide.There are many ways to come to a
decision on whether or not to sell your mineral rights.
However, when we talk to our clients, we discuss their
mineral ownership decisions by asking two simple questions.
1 - If your mineral rights never produced
income, or produced a dissapointing amount of income, would that
take away from your quality of life. In other words, are you
relying, in any way, on income from your mineral rights?
2 - Are all your eggs in one basket?
Meaning, is your mineral or royalty ownership a signifcant
piece of you and your family's wealth?
If you answer "yes" to either of these
questions, then we would advise you to strongly consider selling
all or a portion of your mineral rights so you can diversify.
Caddo is always willing to give you a free consultation on your
mineral ownership. Give us a call or send us an email and
we'll get back with you promptly. We'll give you our honest
opinion, and we'll tell you the truth. We will
NEVER pressure you to sell, and we'll do our best
to answer your questions.
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 similiar 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 unleased 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.