The Financial Gain When Selling Oil and Gas Mineral Rights


If you are a current owner of oil and gas mineral rights you are already aware of the many financial benefits of hanging onto those rights. However, times can become tough, and you may be in dire need of some quick cash to help with unexpected financial woes. Purchasing your oil and gas mineral rights may have been the right move for you originally, but we all know that circumstances can change and you may need to sell those rights. If this is your current situation and you are considering selling oil and gas mineral rights, then it is crucial to know the facts and the financial gains involved.

Pros and Cons to Selling

Many individuals choose to sell because are experiencing financial hardships. This is definitely a good reason to sell, and this would give you the extra money you need without taking out loans and such. However, the long-term potential you would have to make more money would be gone. Instead of selling oil gas and mineral rights you could consider simply leasing them out. That way, you have an ongoing residual income stream along with your salary or any other income that you may produce. If you need a lot of cash fast, selling is a good option. Otherwise leasing is a better option for you due to the long-term possibilities of increased royalties.

Leasing Instead of Selling

In the section above it was mentioned what the pros are to leasing your oil gas and mineral rights. However, there are some cons to doing this. You would then be allowing access to your property to a company or another individual. They would then have the right to drill on your property below the surface in whatever manner they want to do so. While you would be receiving residual income as a result of the lease, you would be giving up some of your rights as a homeowner. You would still own your home but not own the soil beneath it.

If You Do Sell, Sell Low

If you decide that selling oil gas and mineral rights is a good option for you, then it is best to sell low. This is due to drilling companies that pump and drill much less from the ground until the prices for oil and gas rise again. People are using less fossil fuels, which lowers demand. So make sure you find out what the rates are.

Selling oil gas and mineral rights can be a great choice if you need the extra cash right away. However, leasing is the better option if you are seeking long-term residual income. It simply depends on what your current financial needs are, but considering the future is also very important.

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