Reasons to Sell

Reasons to Sell

Like any natural resource, your oil and gas interests deplete with time. Each month your wells produce, there are less oil and gas left in the ground. Selling your royalty income may provide you with cash to place into other investments that may grow, versus deplete, over time.

Estate Planning

When a family member dies, royalty interests typically complicate the handling of an estate. Properties split between many heirs often have little value and a great deal of paperwork. In addition, the legal cost or costs to maintain the property may total more than the value of the property itself. While leaving minerals and royalties to your family may seem like a smart solution, many times, because the royalty becomes further and further divided, the actual cash flow that they receive is trivial. The small payments still hold all of the responsibilities of a larger interest that could become a paperwork and administrative headache. In addition, paperwork associated with transferring and maintaining an oil and gas property is complicated; therefore, new ownership is a learning curve that may create the potential for extra accounting and legal fees.

Paperwork

Selling your oil and gas properties can help eliminate an often overwhelming avalanche of paperwork, including complex records of income, 1099s, county, state and federal taxes required to manage a property. It is often a stressful burden for someone who is not a professional oil and gas, or mineral manager or dedicated to keeping up with the laws governing this type of asset management.

Cash Flow

Selling your royalty properties may be an attractive option when there is a need for cash or if the income from the property is not a significant part of your total income. Receiving a lump sum cash payout allows for everything, from the elimination of credit card bills and medical expenses to providing extra monies for a college education for children or grandchildren. Or even for a dream vacation.