Mar 26, 2015

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Considerations for Selling your Mineral Rights

There are some circumstances when selling your mineral rights is the better option than leasing. True, when you sell your mineral rights you can no longer benefit from the yields when there are any. This can be truly frustrating, but mineral rights are highly speculative at best, and most often do not even pan out. Leasing keeps your finger in the pie just in case there are minerals in commercially viable quantities, and you still own the rights.

On the other hand, if you only own part of the property that has mineral rights, a lease can make it very complicated for you and your co-owners. For one thing, negotiating a lease will involve more people. For another, even if you get a lease contract that everyone can live with, the paperwork and administrative burden to make sure that everybody has a fair share of the proceeds and royalties may be too heavy for the money you eventually get for your share. This is especially true when the property is not yielding a lot yet, so the royalties may be next to nothing. As an article on The Mineral Auction website puts it, it may be more trouble than it is worth.

Another scenario where selling your mineral rights makes more sense than leasing it out is when you need a significant amount of cash at once. It could be to buy into a business, buy new property, pay for college, or pay off debts. You only get money from a lease on a piecemeal basis, and it is obviously going to be much less than a purchase, so selling your mineral rights is the best option for you.

If you do decide to sell your mineral rights, you have to be sure that you are getting the right price for it. You should consult with an oil and gas attorney if you get an offer to purchase and discuss why the price is right or not. It is easy for an amateur to get confused over the whole thing, so you may want to leave the selling to the professionals. There are companies that specialize in putting mineral rights up for auction and getting the best deals for both sellers and buyers.

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