Understand Surrounding Oil and Gas Activity
This is Troy Eckard with Eckard Land and Acquisition to talk to you about mineral rights. Today in the mineral market there is a lot of variances between a mineral that’s located in one particular part of a given state in another part of the same given state. In fact, what’s taking place is there is a real dynamics between the value of minerals based upon current production and cash flow, expectations of current and ongoing development, and the end result of how many only gas reserves are expected to be extracted from an area particular minerals.
You as a mineral owner, you should really become educated and aware of the oil and gas activity in the area in which you own minerals… for a couple reasons:
One, when you are approached by a land company, and they want to come lease your minerals for exploration in the future. you want to make sure that you have the right negotiated terms when it comes to at least bonus that you’re paid for the right to drill on your property. You also want to make sure that you retain the right amount or percentage of royalty to make sure that you get as much royalty as you can for your own interest.
So, when the wells are drilled and are commercially productive, you receive the right or fair amount of negotiate royalty distributions to your minerals that you own. In addition, there may be an opportunity for you to sell your minerals. Now, most minerals that are sold are based upon the buyers expectation of not only current value, but future value totally related to commodity prices, exploration, total potential reserves in place and the actual longevity or multiplicity of rewards that will be eventually drilled and developed on the minerals that you own.
This is a pretty wide open area evaluation. So you may have to seek out professional help or you may find that you are in a position of negotiating with your hands tied behind your back. This is Troy Eckard with Eckard Land and Acquisition. Remember as a mineral owner you own in perpetuity, it could end up being the best investment you have in your entire lifetime. I would take the opportunity to be informed, to be educated and to look for a company that you can deal with that you trust and feel comfortable you’re getting a fair transaction. Have a great day.