The Oklahoma Mineral Market is Slowing Down

Introduction

What was once a complete frenzy with Oklahoma minerals at the end of 2018 has now slowed down significantly halfway through 2019. The slowdown of the Oklahoma mineral market can be attributed to many different factors, but no factor is larger than the reduction of Wall Street funding. Make no mistake about it, there are still plenty of opportunities in mineral rights investing, but the number of mineral buyers has been reduced significantly. We’ve taken a closer look at what has become a buyer’s market for Oklahoma minerals and what it means for mineral owners.

Wall Street Has Slowed Down Funding

Starting in late 2018, Wall Street began slowing down funding to shale companies significantly. This means companies have had to find new energy capital sources, which presents its own challenges in the process. Mineral buyers have been hesitant to pay top dollar for oil and gas minerals due to the uncertainty of financing. In a way, funding has had to revert back to many years ago when if a mineral owner wanted to drill a well, they had to raise money to do so themselves. We haven’t completely fallen back to that point yet, but it is one of the reasons why potential mineral buyers are hesitant to complete a transaction during this time of uncertainty.

We Are In A Buyer’s Market For Minerals

Mineral buyers today aren’t willing to buy oil and gas minerals if they aren’t in line with current market conditions. We appear to be in a strong buyer’s market in this regard since there aren’t as many buyers to compete with and those buyers know the market is shifting. Mineral buyers typically have more background knowledge on Oklahoma mineral rights and are educated on where the money is coming from, so they will do extensive research before making an offer.

Approaching A Buyer’s Market As A Mineral Owner

When you own oil and gas minerals in a buyer’s market, you have to take advantage of an opportunity when you see one. Otherwise, you may miss out on the small window to make a significant profit and have to wait a long time before another one comes along. You can’t expect to have multiple offers on the table at any given time right now, so sometimes the best decision is to make no decision at all. If you can hold onto your minerals during this buyer’s market, you may have better opportunities come your way in the near future. Otherwise, understand it’s likely you’ll have to accept an offer under market value if you must sell.