Questions and Answers For Owners of Mineral Rights and Royalties

Q. I own mineral rights and don't know what they are worth. What should I do?

A. Read the section below titled "About Mineral Rights". Your mineral rights could have significant hidden value.

Q. Is my personal information kept confidential?

A. We endeavor to keep all personal information that you provide to us confidential. Please read our Liability Disclaimer and Privacy Policy for more details. We do not provide your confidential information to any third parties without your consent.

Q. Once I contact your Company to assist us in a sale transaction, do I have to sell my property with you?

A. No. We are a consulting Company and our services are charged on an hourly or project basis. We will also consider a success-based fee if you wish to sell your property and we find you a buyer. If we work on your project, we will provide a written contract for your approval.

Q. Do I have to sign a contract of any kind?

A. Only if we agree to work with you on your project. All agreements will be in writing.

Q. Do I have to pay fees or commissions when using with your consulting services?

A. See above. We charge fees as agreed to between our Company and a Client.

Q. Do you have a Privacy Policy?

A. Yes. You can review our Privacy Policy on the site.

Q. I receive a royalty from a producing well. Can you help us determine whether we are getting paid correctly?

A. Yes. we can review your royalty statements and lease documents to see if the royalty deductions are being handled correctly.

About Mineral Rights

Q. I don’t understand all the details of land leasing and negotiations. What do I do?

A. Contact us and we will explain the relevant terms and assist you with your negotiations.

Q. I have been approached by an oil company landman and he has offered to lease or purchase my oil and gas mineral rights. What do I do? How do I know if this is a fair offer?

A. When a written offer to lease or purchase your oil and gas mineral rights is presented to you, we recommend that you contact a local oil and gas attorney or landman and discuss the offer with a professional. Lease terms can vary in every lease document so obtaining solid advice is critical and leasing or selling your mineral rights is essentially a real estate transaction. Key items to negotiate are the lease bonus amount, the royalty reserved, pooling clauses and the primary term of the lease - to name a few. Again, consult a landman or attorney in your area for assistance but make sure that the advisor you choose is familiar with oil and gas leasing transactions.

Q. Should I consider selling my mineral rights? 

A. Yes, in certain circumstances. Depending on the interest that you own, you should consider selling your mineral rights. When mineral rights properties are split through the estate process, ("fractionalization") the result may be that each relative owns a very small portion of the title (ie. 1/5th of the title to 100 acres with your relatives holding the other 4/5ths). Situations like this may result in lengthy and complicated transactions with each relative receiving only a small portion of any proceeds from a leasing or sale transaction. At some point, the paperwork associated with owning small mineral rights interests may outweigh the value. Companies make it their business to acquire small interests from land owners and may offer you a significant premium for your interests.

Q. I inherited a small interest in some non-producing mineral rights and don't know what to do next. I don't think that they are leased out to anyone. Do they still have value?

A. Yes. With the rapid onset of horizontal drilling and multi-stage fracturing, new oil and gas wells are drilled every day in areas that were previously thought to be non-productive. As a result of this technology advancement, your lands could have significant value.

Q. I inherited a small interest in some revenue producing mineral rights and would like to know what these rights could be worth. I believe that they have been leased out to an oil company. I really don't even know what I own in these lands but the checks are small and steady.  What do you think?

 A. Revenue producing mineral rights often have value that is primarily derived from the monthly royalty checks ("cash flow") received by you as the lessor and mineral rights land owner. Your lands have probably been leased in the past and the lease is likely to remain in place until the producing wells are no longer viable. Depending on the production history of the well(s) on your lands and the future revenue potential of these wells and your property, oil and gas investors could pay you up to 48 times your monthly cash flow - maybe more - maybe less.

Q. Can you please explain what to expect in a leasing situation?

 A. Generally, if an oil and gas exploration company has concluded that the oil and gas resource potential of an area is promising, the company may decide to commit the time, money and effort into a land acquisition and leasing program in order to obtain the right to explore, drill for and produce leased substances from the project area lands. Once a leasing program is commenced, un-leased owners of mineral rights are contacted directly by the oil company or its agent with the objective of negotiating a lease. In many cases, the title and ownership to mineral rights is held in numerous split-titles, usually by the descendants of the original mineral rights owners. This situation can result in complex fractional ownership with individual mineral rights owners now living in "all corners of the world". Oil companies or brokers (acting on their behalf) attempting to lease these rights would typically conduct a land title search and then try to contact the mineral rights owners by phone, by mail or in person - provided they can be located. Due to the complexity and cost associated with tracking down numerous mineral rights owners, many are never contacted by the oil company and valuable lands are left un-leased. Lands are also commonly not leased for technical reasons such as lack of geological potential, limited accessibility or for environmental or economic reasons. If a successful lease transaction is finalized between the mineral rights owner and a third party, depending on the circumstances, mineral rights owners may receive lease signing bonuses and a royalty percentage of the leased mineral rights produced and sold from the leased property. Leases generally have a term of between one and five years after which the lease may continue (if  held by production or deemed production) or the lease may expire. When a lease has expired (or is near expiry) landowners may consider re-leasing or optioning the lands to a new lessee under negotiated terms. Mineral rights owners may also sell all or a partial interest in their mineral rights. Prior to selling mineral rights, we would recommend that you have an evaluation of your mineral rights completed.

Q. Do you know what my mineral rights are worth?

A. Mineral rights can have a wide range of value. Value can be determined based on a number of factors including historical leasing activity, current royalty revenues (if any), past and potential drilling activity, industry conditions and area competition. Mineral rights, like any real estate, are finite. If you own mineral rights and royalties you own an asset. Ultimately, the market decides the value, but in many cases the market simply doesn’t know how to find you. Contact us and we can help.

Q. What can I expect if someone wants to lease my oil and gas mineral rights?

A. If a successful lease transaction is finalized between a mineral rights owner and a third party, depending on the circumstances, mineral rights owners may receive significant lease signing bonuses and a royalty percentage of the oil and gas produced and sold from the leased property. Leases generally have a term of between one and five years after which the lease may continue (if held by production or deemed production) or the lease may expire.

ABOUT ASSET AND LIABILITY MANAGEMENT SERVICES

Q. What services can you provide to oil and gas property owners or companies?

A. Our Company provides assistance in deal negotiations, purchase and sale documentation and complete oil and gas land administration services. We have a network of qualified consultants to assist you with most oil and gas matters, with a focus on properties in Canada.

Q. What do you charge for your services?

A. Contact us and we will provide our rates. We will typically quote an hourly rate for a project. 

Q. Can you provide engineering or geologocal evaluations to establish property value for a producing asset?

A. Yes, we use qualified Professional Engineers and Geologists, on a consulting basis. 

Q. I have a working interest in a non-producing well. How can I get rid of this liability?

A. We can asist you by finding a buyer, or preparing a quit claim or surrender of interest so that the liability may be extinguished or minimized.