What are oil and gas mineral, royalty and overriding royalty interests?
Mineral and royalty interests both involve ownership of minerals underneath the ground. A mineral owner has the right to execute leases and collect bonus payments, whereas a royalty owner does not. Both mineral and royalty owners receive income from the producing well, but only the mineral owner receives the up-front bonus payment.
Like mineral and royalty owners, the owner of an overriding royalty interest receives a portion of the income from the production of oil and gas. However, the owner of an overriding royalty does not own the minerals underneath the ground; he or she only owns proceeds from the production of the lease. An overriding royalty interest expires when the lease has expired and production has ceased. Mineral and royalty owners maintain their ownership after production ceases.
How is the value of my interest determined?
Prior to mailing offers, Fort Worth Mineral Co. performs a complete evaluation on every well. This allows us to determine the value of each royalty owner’s interest. We use production decline curve analysis to predict future well performance and calculate remaining oil and gas reserves. With energy prices at historical highs, this may be an opportune time sell a royalty interest, as your interest is worth more when prices are high.
What are some of the reasons individuals sell their minerals or royalties?
Some of the most commonly cited reasons are: estate settlement, cash flow needs, paperwork/accounting elimination, or an investment change to an appreciating asset. Production from an oil or gas well declines with time, and correspondingly the royalty income from the well diminishes through time. Individuals often prefer to sell their oil & gas interest and invest in an asset that has increasing income rather than decreasing income. Another common motivation is the desire to sell their interest at record pricing, thereby ensuring that they cash out their interest for maximum value, as opposed to selling in a downturn when their interest would be worth less.
What types of interests does Fort Worth Mineral Co. buy?
Fort Worth Mineral Co. buys producing mineral, royalty, and overriding royalty interests located throughout the United States. We buy single well and multiple well interests. We are also active purchasers of working interests.
If I ask to receive an offer for my royalty interest, does that obligate me to sell?
No. We perform evaluations for free with no obligation to sell. Also, if you do decide to accept our offer, there are no hidden fees, charges or commissions from us. Our offer price is the amount that is sent to your bank!
How do I receive an offer for my oil & gas interests?
Usually, royalty owners provide us with a copy of their last two or three royalty statements. If you do not have any royalty statements on the lease, please contact us as we can often perform an evaluation using public information on the lease to provide an offer to you. We can usually provide you with an offer within two business days. There is no obligation when you receive our offer; you may wish to accept our offer or decide to retain your interest. If you decide to accept our offer, we will mail you all of the necessary paperwork in our acceptance packet. We close all of our acquisitions with no hidden fees, charges, or commissions, and we usually have the royalty owner paid within 2-3 weeks from the date of their acceptance.
How does the process of selling my minerals or royalties work?
When a royalty owner notifies us that he or she would like to accept our offer, we will then prepare the necessary paperwork and mail the royalty owner an acceptance packet. This will include a cover letter with instructions to assist the royalty owner, a mineral and royalty deed, and a bank draft for payment. The royalty owner will then sign the deed in the presence of a notary public, and also sign the back of their bank draft. They will then take the deed and their bank draft and give it to their local bank for collections. The local bank will then forward your paperwork to our bank, Intrust Bank, in Wichita, Kansas.
How can I be sure that I will be paid after I return the documents?
Your local bank will send your signed deed and bank draft to Texas Capital Bank at 2350 Lakeside Boulevard, Suite 800 Richardson, TX 75082. Intrust Bank will hold these documents at their collections department.They will then notify us that your deed and draft have arrived.Only after we have instructed Intrust Bank to fund the bank draft and deliver payment to your bank will they release the deed to us.Thus, we cannot take physical possession of your signed deed unless you have been paid!
Why should I sell my minerals or royalties to Fort Worth Mineral Co.?
Fort Worth Mineral Co. uses sophisticated engineering software to accurately predict the decline rate and reserves of every property we evaluate. We strive to provide the maximum value possible on all our evaluations. And as a family owned company, honesty and integrity are important to us. Through four generations in the energy business dating back to 1912, we have always placed the importance of our reputation ahead of any deal.
If you do not see an answer to a question that you might have, please feel free to contact us toll free at (866)720-8588.