Risks To Selling Mineral Rights Vs. Not Selling Mineral Rights
Risk to not selling: Having under-performing wells drilled into your minerals
Risk to not selling: Unpredictable market factors that result in lower future values of minerals
Risk to not selling: Declines in oil prices
Risk to selling: Having over-performing wells drilled into your minerals
Risk to selling: Receiving less than a fair market price without the help of Simply Minerals
All risks should be taken seriously, since they could affect you and your loved ones now or in the future if you choose to not sell your mineral rights.
Risky Situations and Know Examples of Selling Mineral Rights on Your Own
#1 The Trap of the Bank Draft
Don’t get too excited if you get a bank draft in the mail for your minerals. It might say “…deposit this draft and we’ll talk about buying your mineral rights royalties later”. This sounds wonderful, but it’s a red flag, because once you deposit the draft, you are legally bound to sell your minerals. You’re stuck and cannot negotiate as all of your leverage is out the window.
#2: The Bait & Switch
We know the old business trick when you’re offered one thing up-front, and then offered something completely different in a purchase and sale agreement.
Operators, oil and gas companies, buyers and purchasers who introduce themselves and pitch you right away should make you question. “We’ll make you an offer of $50,000 cash today” sounds amazing. But, what if you’re property is worth $500,000? How did they arrive at their figure? Simply Minerals performs a thorough valuation and gives you a fair market value to determine whether you should sell at this time or not. And finally…
#3 Not Getting The Fair Market Value
It’s not uncommon for these mineral rights buyers to give offers that are far lower than what your mineral rights royalties are truly worth. We’ve seen mineral owners sell for pennies on the dollar. Yes, every business has to make a profit, but the gap we’ve seen between true and fair market value, and the offers some mineral owners get can be appalling. Consult a trusted professional such as Simply Minerals who knows and understands the market. You wouldn’t sell your home without a real estate broker, so the same should be considered with mineral rights.
There are several companies in the mineral rights and royalties space who provide integrity and due diligence within their work. On the other spectrum, there are some companies who treat you more like a number than a person whose family’s future could be at stake. Mineral rights and royalties transactions are complex, but Simply Minerals will handle everything from assessment, to marketing and negotiating, to final sale. You will be amazed at how simple our process is in selling your mineral rights.