Sell Mineral Rights

Why Sell Your Mineral Rights?

 

There are many different reasons to sell your mineral rights: cash to improve your home, pay off debt, finance your children's education or realize the cash value of your assets today. But, by selling your mineral rights today, you'll receive a lump sum upfront, rather than the traditional smaller monthly royalty payments paid over a long period of time.

 Our partnership with our capital sourcing ensures that we have the resources to move quickly to close your transaction, whether you’re selling a small or large asset. We believe Avila's technical assessment of the productivity of your resources will determine a competitive price for your mineral rights and royalties.

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What Determines Mineral Rights Value?

 

• Location: Howard, Martin, and Midland counties sit on a highly valuable Midland Basin play. In addition to this, if the location of your minerals rights is near known hydrocarbon accumulations, the mineral rights value may be higher.

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• Producing vs Non-Producing Mineral Rights: Generally, minerals that are currently under production are going be worth more than non-producing minerals. If you have producing minerals, the value also depends on the flow rate. The expected presence or likelihood of future production within an area also influence our appraisal value. Non-producing minerals are generally less valuable because of the uncertainty associated with their future production rate. Part of our assessment involves evaluating production and quantity of minerals in nearby locations and expectation of wells drilled in the area.

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• Acreage & Size: Mineral rights with a high acreage to production rate are generally more valuable than those with smaller acreage. Greater acreage offers the potential more production opportunities. At Avila, we have experience working with individual property owners and larger portfolios, so we can develop valuations for your assets, regardless of the size of your property.

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• Oil & Gas Prices: The commodity prices of oil and gas fluctuate constantly. The market value of your mineral rights can shift dramatically over time, making the worth of future gas royalties uncertain. These ever-changing prices have a great influence over your royalties. Knowing how to value oil royalties and mineral investments are important, so at Avila, we're here to help.

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Types of Mineral Ownership​

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• NPRI - non-participating royalty interest, the owner has a right to all or a portion of the royalty from gross production, but does not have the right to execute a lease, receive a bonus, or any delay rentals. An NPRI owner also does not have the right to produce the minerals by himself, and they are not responsible for the operational costs associated with production or drilling. Other mineral rights owners generally participate in at least one of the previously mentioned activities. An NPRI may be appropriate, for example, for allocating inheritance for receivers to have a steady stream of income from the royalties, but does not have to deal with negotiations of leases or make decisions concerning the wells. A seller of the land may reserve the mineral rights but assign a portion of the royalties to the buyer by using a NPRI. This way, the buyer can also benefit from future production and drilling but not partake in decision making. Conversely, if the buyer of the land is also acquiring the mineral rights, he or she may assign an NPRI to the seller as additional compensation. 

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• SURFACE RIGHTS OWNER- If you own the surface rights to an area of land, it does not necessarily mean you own the minerals below that land. In areas of the country where drilling or mining occurs, the ownership between the surface of the land and the minerals beneath it are often severed. As solely a surface rights owner, this means you have no royalty rights to the minerals that are extracted from beneath your land. However, depending on the state, there are laws to help protect surface owners and make them feel more comfortable with oil companies drilling on their land.

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• MINERAL RIGHTS OWNER- If you are solely a mineral rights owner, you earn the royalties that come from extracting the minerals from the land in question. You do not have control over what occurs on the surface. As the mineral rights owner, you can sell, mine or produce the gas or oil below the surface. When it comes time to drill, you also have a right to as much of the land surface as is reasonably necessary to access the minerals, but there are some states with laws that protect surface owners’ rights.

 

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