Mineral rights refer to the legal right of an estate owner to exploit, mine, produce any or all minerals lying below the surface of their property. In the U.S, complete ownership of both surface and underground minerals is known as fee simple estate. Mineral Rights
Selling mineral rights is a personal choice and may arise due to some factors Including the need for urgent cash, length of time before the minerals offer a profit and significant capital Investments before mining
Sale of these rights should follow legally binding procedures. The two main ways of selling rights are,
1. Individual selling.
2. Selling through a mineral firm.
Individual selling means the direct sale of mineral rights between buyer and seller without any Intermediaries. This method is widely used. However, its pros exceed its cons. Sell Gas Rights
The pros Include,
1. The owners can get customized agreements best suited for them.
2. Decision making is fast because only the owner is Involved.
The cons Include,
1. Time wasted looking for clients.
2. Lack of exposure. The estate owner may not reach as many customers as possible.
3. Tough negotiations if an owner is not well versed in the mineral Industry.
4. Risk of flippers/brokers who take advantage and buy low then sell high. Sell Oil Rights
Using an Industry expert means hiring a third-party as an agent. This method has several advantages Including;
1. Owner saves time as agent takes care of client sourcing
2. Higher exposure or greater market penetration.
3. Guaranteed security from unscrupulous traders or brokers.
4. Accurate property valuation.
Disadvantages of using an industry expert Include the following,
1. High costs. Agent retains total sale value fraction.
2. In case of Insider dealings, the estate owner will lose.
Various other options exist such as leases and royalties. A lease is a short-term buyer-seller agreement that allows prospectors to conduct tests and mine if possible. Any minerals acquired during the contract duration is paid to the owner as a percentage termed as royalties. Leasing of oil and gas deposits is common because of the uncertainty of getting these minerals. Selling mineral rights is a lengthy and complicated matter that should be well thought out by the seller before making any decisions. This process may be succesful or very costly depending on the approach. Selling Mineral Rights