How to Value oil and gas Royalties

How to Value oil and gas Royalties

If you have been considering whether to sell royalties, you’re probably trying to find out how to value oil and gas royalties.  Your royalties could be worth a significant amount of money if you decided to sell royalties.  We’ll walk you through everything you need to know about how to value oil and gas royalties.

Estimate the Value of Oil and Gas Royalties

The only true way to know the value of oil and gas royalties is to put them on the market for sale.  However, you can still estimate the value of oil and gas royalties.  Most mineral rights buyers are willing to pay somewhere between 4 years to 6 years worth of current production.

To see how much your oil and gas royalties are worth, simply take your most recent check stubs and come up with an average monthly amount you receive.   For example, if you received checks for the last 3 months that totaled $275, $250, and $300, the average amount you received is $275.  You would then plug the average amount you receive into the calculator below:

This calculator is a handy tool to estimate the value of oil and gas royalties, but you can’t know for sure how much they are worth until you sell royalties.  The reason is that your royalties could be worth more or less than the range provided in the calculator based on a number of factors.

How to Sell Oil and Gas Royalties

If you are interested in selling oil and gas royalties, you need to carefully research all of your available options.  If you want to maximize the value of your royalties, it’s extremely important that you get your property in front of a large audience of mineral rights buyers.   When you sell royalties by getting them in front of a large audience of buyers, you are letting buyers compete to pay you the highest price.   This ensures that you get the highest possible value when you go to sell royalties.

Another important factors to consider is whether the buyer you are working with represents a true end buyer.  There are a lot of people in the mineral rights business that simply flip your mineral rights to others.  They won’t actually purchase your minerals, they simply get you to agree to sell at a certain price, then find someone who can pay more and pocket the difference.   You want to ensure that you are working with the right people when you sell oil royalties.    To get the highest value for oil and gas royalties you want to sell to an end buyer who is going to keep your royalties for the long term because they will pay the highest price.

So how to do get your property in front of the largest number of buyers and also make sure you’re selling to an end buyer?  We recommend that you list your property with US Mineral Exchange.  We have referred numerous mineral owners to them and they always have a positive experience.   US Mineral Exchange helps mineral owners get their property in front of a huge audience of mineral rights buyers, and they also make sure that buyers who make offers are legitimate companies.

Should you Sell Oil and Gas Royalties

Another common question we get from mineral owners is about whether they should sell royalties.   There are a number of reasons to sell royalties including:

  • Oil and Gas Prices
  • Retirement
  • Estate Planning
  • Inheritance
  • Meeting a short term cash need
  • Down payment on a home
  • starting a business
  • Paying for education expenses
  • Fluctuating monthly income

Everyone’s situation is different and the decision to sell is entirely yours.   For many people, getting a guaranteed amount of cash today is better for them than inconsistent royalty income with no guarantee.

Questions about oil and gas royalties value?

If you are thinking about sell royalties and have questions about the value, fill out the form below.  We can help answer your questions about the value of your royalties:

Mineral Owner Inquiry Form

Your Name

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Average amount you receive each month:

Is the property leased?:

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