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A Success Story for Mineral Assets

When the COVID pandemic and the ensuing economic downturn caused the oil and gas market to plummet, one Texas family (among thousands) watched their land’s most valuable asset—the mineral interests—become almost worthless. But their story, thanks to patience and expert assistance from a LandGate professional using LandGate’s trusted third-party data to create a listing, had a happy ending: the family secured a better deal on their mineral rights than they ever thought possible.

In late 2019, several family members who owned a large mineral holding came to LandGate to market their property. The minerals, which had been family-owned for many years had never been developed despite being surrounded by productive oil and gas wells.

Some family members wanted to sell the mineral interests outright, while others wanted to keep the minerals in the family, but all were concerned that the minerals might never make money. After consulting with a LandGate listing professional for assistance with listing their mineral rights for sale, several mineral buyers from across the country began submitting offers to purchase their interests. Then, COVID hit and global demand for oil and gas plummeted. Seemingly overnight, the price of oil—and the relative value of the family’s listed property—went to zero. Investments into oil and gas mineral purchasing virtually stopped and the family’s chance to capitalize on its minerals essentially vanished. While the outlook was not great, LandGate’s free listing platform offered the family a no-risk option for keeping their mineral interests in front of high-intent buyers. Then in late 2020, the price of oil gradually started to rise. While the majority of mineral buyers and operators were still inactive, there were opportunities on the horizon for the family: 1. All of their oil and gas was still in the ground and becoming more valuable by the day; 2. Their minerals were not controlled federally, and investments were beginning to flow back into West Texas where the minerals are located; 3. The world runs on energy, and demand was going to rise as the global economy began to get back up and running. Quickly the price of oil hit $40/barrel (11/2020), then $50/barrel (12/2021), then $60/barrel (4/2021), then $70/barrel (6/2021). After nearly two years of witnessing the most turbulent oil price fluctuations in history, the family’s patience paid off and offers started flowing again. Numerous lease and purchase offers were submitted through the LandGate platform. Working with their land professional in addition to their LandGate listing, the family members reviewed their offers and negotiated a deal that allowed them to sell a portion of their minerals and retain another portion that were to be immediately leased for the highest rate in the area. The deal exceeded the family’s expectations, delivering large upfront monetization and shared upside of future potential drilling on their legacy family minerals. The family was extremely satisfied, but the opportunities weren’t over yet. Several family members decided to 1031 exchange their minerals for other property while others chose to take cash and pay capital gains tax on the sale. LandGate referred the family to mineral rights experts and a 1031 broker to help facilitate the sale of their minerals. This family’s experience illustrates why thousands of landowners and land professionals rely on the LandGate platform to monetize the natural resources associated with real estate including renewable energy, oil and gas, carbon credits, water, and mining.

LandGate not only connects brokers with a new class of buyers, it also connects brokers with landowners who want to work with folks just like you. Contact LandGate today to begin expanding your business into the $4 trillion/year energy market.


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