If you do not currently need the money, you may be willing to hold your minerals for the long term in hopes that something will happen someday in your area. There are certainly benefits to this strategy. If a new play develops around your property, selling your minerals will limit your future ability to participate in lease bonus income and royalties. Mineral interests are a valuable asset, and you should carefully consider your options before selling.
Royalty interests are a bit different. If you sell a royalty interest, you still retain your mineral rights. If you currently own a producing royalty interest, it comes down to a “present value” calculation to figure out what a lump sum today is worth vs. the unknown future monthly revenue. Once production stops, or if a well does not get drilled within the term of the lease, the royalty rights you sell expire with the lease. After a lease expires, you are free to lease again in the future and the royalty interest under the prior lease expires and all rights revert to you.
Make money quickly – receive upfront payments for your mineral/royalty interest
If your property isn’t currently producing oil/gas royalties, it could be years before it starts generating any income. Selling your mineral/royalty interest to an investor offers an opportunity to secure a significant lump sum of money upfront. Take advantage of today’s strong commodity prices by contacting Arena Minerals for an instant cash payment. By selling your mineral interests, you can leverage the lump sum to invest in other assets, pay down debt or meet other financial obligations.
Reduce Risk
There are many risks and uncertainties in the oil and gas industry, particularly in today’s environment. Some prospects never get drilled. Dry holes are common. Many wells decline quickly. Wells can get shut in if prices drop too low. Selling your oil and gas royalties ensures that you secure a guaranteed payout now.
Eliminate the uncertainty of future royalty income
Oil and gas prices are very volatile. Production volumes can decline and wells can be shut in at any time. Mineral/royalty owners often face challenges in predicting the long-term returns of holding onto their rights, as the value of royalties is largely beyond their control. This unpredictability can make financial planning difficult. Selling your mineral/royalty rights to Arena Minerals offers a quick and dependable solution, providing you with financial certainty and peace of mind.
Drilling Risk
While mineral and royalty owners don’t pay any well costs, dry holes are common. When a well fails to make a discovery, the dry hole can highly reduce the value of your minerals going forward. According to industry statistics, the majority of all wells are dry holes (except in the case of development wells in a field discovery). In many cases, oil companies lease vast areas they consider prospective, but in many cases, a well never gets drilled on much of the acreage.
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