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4 Things To Consider When Selling Mineral Rights

3 September 2015

Jeffery Wright

If you own a property that contains oil, gas, shale, coal or other so-called minerals, you may have been approached to sell mineral rights to your land. However, before you do so, it's important to consider the following tips. These suggestions will help you best protect your interests.

Think Twice Before Accepting an Offer from a Landman

Oil and gas companies often try to expand their own holdings in the area, and hire landmen to talk to mineral owners in the area about selling their rights. However, keep in mind that whatever a landman offers you is just the offer of one particular buyer. It does not necessarily reflect the market value of your rights.

Consider Selling a Portion

As a mineral rights owner, you have the right to sell all of your interests in a particular property. However, leasing rights can provide a royalty income over a number of years, which can provide a yearly income that can be a welcome addition to your financial situation. Consider selling a portion of your mineral rights and retaining some to lease in the future. Talk with an accountant to see what choice makes the most sense for your financial needs.

Think About Selling the Land as Well

You may get offers to buy the coal or shale that lies beneath the ground, and because you may not have the ability to access those minerals you may consent. In many cases, you will still own the surface land and may choose to allow livestock to graze on it, or you may opt to build storage sheds or other structures.

However, you may want to consider selling the surface land as well, particularly if you have no plans for it. That can result in a higher profit for you that you can use to purchase other properties.

Find a Land Broker

In order to ensure that you do indeed own the minerals on your property, it is a good idea to enlist the help of a land broker who can do a mineral ownership report. They will investigate mineral deeds or leases to ensure that you are the legal owner of record.

Land brokers can also help bring your offer to sell to multiple buyers through marketing and contacts in the industry. This can be helpful, because you can get multiple offers for your rights, which can lead to the most profit for you.

Now that you have some information about how to make the best deal for yourself when selling your mineral rights, keep them in mind when negotiating with possible buyers. Work closely with your land broker to make sure you benefit from any sale.

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