What Are Minerals and Royalties?

Category: What Are Minerals and Royalties?

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The #1 Worst Mistake Mineral and Royalty Owners Make

While there are quite a few no-no’s to abide by when it comes to selling minerals and royalties, the biggest one that comes to my mind occurs after an interest owner calls me wanting to know if the offers they have been receiving are worth accepting.

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Man in blue shirt intently reviewing documents on mineral rights appraisal and mineral rights value on his laptop in a home office setting.

Did you get an offer to buy your minerals that blew your socks off? Here’s why….

I hear it all too often…At the start of our complimentary consultation, a mineral and/or royalty owner tells me they have been offered loads of money to buy their interests and they want to know if it’s a good deal.

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Oil pump jack in desert at sunset, highlighting economic potential and mineral rights value.

Unlocking Value: Your Expert Guide To Mineral Rights

Looking for expert advice on mineral rights and royalties? Venergy Momentum is the go-to resource. With an A+ BBB rating and glowing 5-star Google reviews, our team is dedicated to providing unrivaled service in the field of oil and gas mineral rights. Our expertise ranges from valuation to negotiation, meeting the full range of mineral […]

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Increase Your Earnings With Expert Mineral Rights Investment Guidance

With Venergy Momentum, you can jump into the world of mineral rights investments. With an A+ rating from the Better Business Bureau and great reviews on Google, we know the US mineral and royalty market very well.The vast U.S. landscape, which is full of both federally and privately owned land, makes mineral and royalty rights […]

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Assessing and Valuing Mineral Rights: A Guide to Mineral and Royalty Appraisals

Mineral rights are not just legal entitlements; they are opportunities to harness the value beneath your land. Understanding the potential of these rights is the first step toward unlocking their true value. We specialize in appraising and managing these unique assets, ensuring that you are fully informed and ready to make the best decisions for […]

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Essential Terms Used In Oil And Gas

The Most Essential Terms Used In Oil And Gas 

Get into the global industry of oil and gas with Venergy Momentum’s full list of common terms used in the field. We strive to help you understand the sometimes  complicated lingo  because of our experience in mineral rights valuation in Texas and our extensive knowledge of Texas mineral rights. Want to find out more? Check […]

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Mineral And Royalty Management: Landman, Lawyer, Or Trustee?

Start managing minerals and royalties with Venergy Momentum, a company known for having an A+ rating with the Better Business Bureau and 5-star reviews on Google. We offer a wide range of services that are tailored to your specific needs in the complicated world of minerals and royalties. Explore Venergy Momentum’s services or schedule a […]

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Hedging inflation with minerals and royalties

Financial Security: Investing In Minerals And Royalties As Inflation Hedge

Experience a journey with Venergy Momentum, a company with an A+ rating from the Better Business Bureau that is known for its creative approach to educating mineral and royalty owners. Explore our services that are designed to help you get the most out of the minerals and royalties market. Our 5-star Google reviews back up […]

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A Landman’s Expert Insights On Mineral And Royalty Management

The distinction between in-house and independent landmen is pivotal for anyone engaged in Texas mineral rights. In-house landmen are integral to their firms, focusing on the company’s interests while  independent landmen operate with broader networks and play a crucial role in advocating for their clients, particularly in negotiating mineral rights in Texas. Their ability to […]

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difference between mineral rights and royalty rights

What’s the Difference Between Mineral Rights and Royalty Rights?

Surface Rights, Mineral Rights, Royalty Rights, and Working Interest. These terms are becoming more prevalent in our day and age and starting to gain a lot more attention, especially by venture capitalists and institutional, private, and passive investors looking for a safe place to invest with a minimal amount of risk. These terms are often […]

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Venergy Momentum is a land, mineral and royalty management company specializing in helping individuals, families, family partnerships and/or trusts manage their current land, mineral and royalty interests.

We are experts in title, leasing, and the acquisition and divestiture of mineral and royalty assets and operated and non-operated working interests.

Location

3300 Bee Caves Rd Suite 650 #110,
Austin, TX 78746

While there are quite a few no-no’s to abide by when it comes to selling minerals and royalties, the biggest one that comes to my mind occurs after an interest owner calls me wanting to know if the offers they have been receiving are worth accepting. While I can’t tell them right away without doing research if the offer is legit, I can tell after a few minutes of speaking with them about their assets if they are knowledgeable about what they own.

For those who have inherited mineral rights, and didn’t know they inherited them until they started to receive phone calls and letters from buyers wanting to purchase them, they get a free pass for not knowing anything about them.

However, the long-term interest owners who don’t know how much they own, where they are, or how to manage them properly, are doing themselves a disservice and could be missing out on potential opportunities (or may have already missed out) simply because they did not take the time to learn about them.

Failure to understand your assets, like staying abreast of what’s going on in the areas they are located, as well as local, national, and geopolitical news that could affect your interests, is paramount to making informed decisions as to what to do with them in the short and long-term.

Never Sell Your Minerals…

Some interest owners think they should retain ownership of their minerals and royalties just because that’s the rumor that has been passed down from the generations before them.

I believe this adage left out a few important words, which I share with all of my private clients:

Never sell your minerals…when they aren’t worth anything!

Work with a trusted professional

So, How Much Are My Mineral Rights Worth?

Interest owners always want to know their mineral rights value. We cover this topic in many detailed blogs and videos including:

How minerals and royalties are valued depends on many, many factors. Simply looking at a few revenue statements, or accepting the property values at your county tax office are definitely the wrong ways to determine what your minerals are worth.

Testing the buyer market to see how much your interests are worth is the #1 way to find out your selling mineral rights value. Something is only worth what someone is willing to pay for it and most buyers will value interests very differently. Value is certainly in the eye of the beholder when it comes to a mineral rights sale.

Learn more about this in our blog, Testing the Buyer Market to See How Much Your Minerals are Worth—Does it Work? 


Neglectful Ownership Woes

Just because you are collecting monthly royalty checks doesn’t mean you are gaining the full advantages of your assets. Failure to investigate alternative roads to managing your minerals and royalties could be costing you more money in the long run spent on paying taxes for those interests, and you could also be sailing on a sinking ship.

Did you know monthly royalties are taxed as regular income? Did you know you will be required to pay city and school taxes on them, too?

Did you know you could potentially receive more income in a one-time sale of your interests versus collecting small (and declining) royalty checks over years and years? Did you know you could be eligible for a lower capital gains tax rate, depending on when you inherited them?

Minerals and royalties are an ever-declining asset. Those royalty checks will diminish over time as the well(s) start depleting. If you are counting on those royalty checks sustaining you for forever then you might want to look into how they could be better utilized. The reference to a sinking ship above is when the asset has reached its fully developed potential, meaning there are no more wells likely to be drilled on this asset, and the production and revenue will simply just be left to decline, and will certainly do so over time.

Another important thing to note is that some owners decide to collect those initial big royalty checks and then when they start to decrease it is then, and only then, when they will decide to sell and expect a big payout. This kind of thinking is like buying a brand new car, putting 100k miles on it and then expecting to sell it for the price you bought it for. The value won’t be there because you already received it.

Mineral and royalty buyers will not give you the mineral rights value for which you already took; they will deduct it from their offer price. On the other hand, if your assets are newly-producing and/or there is a substantial amount of production left to be extracted, then now would be the time to look into selling your interests. Buyers will also want that flush production and will pay handsomely for it (if you know how, or work with someone that does know, how to manage a mineral rights sale properly).

Experts analyze mineral rights and royalties in a modern office, focusing on strategic planning with documents and a computer display

Tips to Help You Get Started

  1. First and foremost, make the time to learn about your assets. Begin with investigating, asking questions, and locating as many documents related to your ownership that you can find. Even if you may think a document doesn’t look important, it might be. Ask relatives for any information they may have as well. Knowledge of your family tree is especially helpful with determining mineral and royalty ownership.
  2. Secondly, and almost as important as the first tip, is to seek professional help from a trusted Landman. He/she should have a thorough understanding of buying and selling minerals and royalties, be an expert in the areas your assets are located, and have an extensive network of end buyers. Ask for referrals, read online reviews, and client testimonials on trusted and legit websites. You could also seek an attorney’s advice, but that will come with greater costs, and honestly, attorney’s only really handle the legal paperwork and typically aren’t very knowledgeable when it comes to understanding how to value minerals and royalties.
  3. Be open to the possibilities of selling your minerals and royalties. If you are still of the mind that they should be passed down to your heirs, have you considered asking them if they want them? Do they want the responsibility of managing them? Will they be able to afford the taxes? There are many things to consider when it comes to inherited mineral rights.

Making the commitment to be a responsible mineral and royalty owner will definitely serve you well. It can be a complicated subject, as well as an emotional one, when it comes to deciding what to do, or not do, with your assets. It should be evaluated and considered frequently with the support of a trusted professional in the industry.

Don’t make the #1 mistake of failing to understand your asset. You could be leaving a lot of money on the table and the opportunity to get it again are very slim in this business. Schedule a complimentary consultation with us today so we can help you get started on the right track.

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  • Mon: 8AM–5PM
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  • Wed: 8AM–5PM
  • Thu: 8AM–5PM
  • Fri: 8AM–5PM
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  • Sun: Closed

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Phone: (713) 855-9548

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