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A Guide to Selling Oil & Gas Royalties in 2023

Photo of Land, A Guide to Selling Oil & Gas Royalties in 2023

Up until around 2020, many oil and gas mineral owners across the U.S. were not interested in selling their minerals. In fact, they wanted LandGate to assist them with leasing mineral rights. What we started seeing at the end of 2020 was an increased desire to sell.

Why the change? Seems to be a combination of oil prices bouncing back to $70/bbl and the financial stress placed on a lot of mineral owners due to the pandemic. LandGate wants to answer many of the questions we are hearing from mineral owners. This guide will focus on selling mineral rights as well as selling monthly royalty payments owned by mineral owners who have leased their minerals to a company that has successfully drilled a well.

What is a Mineral Interest?

Mineral ownership constitutes the right to explore for and produce oil and gas. The mineral owner has the right to:

  1. Enter onto the property to explore

  2. Authorize another to enter onto the property to explore (by granting an Oil & Gas Lease),

  3. Receive the benefits (from granting a lease), such as bonus consideration and royalty.

What is a Royalty Interest?

When a mineral owner grants an oil and gas lease to a driller, the exclusive right to drill and develop is transferred to the driller. In exchange for granting the lease, the driller agrees to pay the mineral owner an oil and gas mineral royalty. The royalty is a percentage of the proceeds from the sale of oil and gas produced, which is paid monthly to the mineral owner.

Why Would You Want to Sell Your Oil and Gas Royalties?

Common reasons why our clients decided to sell their royalty interests:

  1. Unexpected medical expenses

  2. College expenses – their income decreased during the pandemic,

  3. They are elderly and want a big cash payment now instead of a monthly royalty check,

  4. They saw the price of oil drop to below zero last year and now want to sell at ~$80/bbl.

There is a chance that in your lifetime, you may never receive as much royalty income as you might be able to receive by selling a portion of your mineral royalty assets up front for a lump sum. Most oil and gas royalty owners do not realize there is a market to sell oil and gas royalties until they receive an unsolicited offer in the mail from a company or individual interested in buying oil royalties. There are thousands of individuals and companies trying to buy producing royalty interests. Unfortunately, oil and gas royalty buyers prefer to make offers to uninformed royalty owners. Some royalty owners might have noticed that their royalty checks are steadily decreasing, which is not good news when royalty owners rely on that check every month. So, when someone offers to pay you 24 times (2 yrs) your last check, you might be tempted to take it. But what you don’t know is that the operator may be getting ready to drill more wells and your royalty check is going to start increasing every month.

Royalty buyers are NOT going to inform you of future drilling, so doing due diligence is crucial when considering any offers. LandGate can refer you to a mineral rights expert who can help you make the informed decisions, and listing your royalties on our our competitive marketplace ensures that you are getting the highest market value for your asset.

Factors Affecting Oil & Gas Royalties Value

There are many factors that affect oil and gas royalty values. The only way to determine exactly what your oil and gas royalties are worth is to list them for sale- when you start receiving offers, you'll know exactly what buyers are willing to pay.

  1. Average monthly income received

  2. Oil Prices

  3. Lease Agreement Terms

  4. Royalty Statement Terms

  5. Location (State/ County) of the Property

  6. Operator

  7. Additional/ Future Drilling Opportunities

Why is LandGate the Leading Resource for Selling Oil and Gas Royalties?

  1. We will include un-drilled (future) wells in your property report's estimates to maximize your sales price

  2. Our software contains well and production data for royalty owners to understand the estimates provided in our free property reports

  3. Will market your royalty interest for sale to thousands of buyers each month

  4. LandGate can refer you to a mineral rights expert through our network of local professionals to help you evaluate offers

Your Oil and Gas Royalties for Sale - Why Listing on LandGate Will Get You More Money

To maximize value when you sell oil & gas royalties, the key is to get your asset in front of a large audience of mineral rights buyers. This allows these buyers to compete against one another, driving up the price and ensuring that you get the maximum market value when you sell your royalty interests.

LandGate has successfully assisted hundreds of royalty owners in closing at a price averaging 4 times their original offer. LandGate’s global-reach website, and large network of oil and gas royalty buyers are key components for creating competition and getting you a fair market value for your asset. Marketing your royalty interest online with LandGate equals more money and better deals.s LandGate is the ideal marketplace to list your oil and gas royalty interests. Contact us or find your parcel on our map to get started:


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