Have questions about selling your minerals or royalties?

In a nutshell, royalties are payments made based on income received over a specific period of time.

If you are a landowner who leases the mineral rights to your property, the company that leases your minerals will typically agree to pay you a percentage of the profits they make from selling the oil and gas collected from the development of your mineral interest. What that percentage ultimately is will vary depending on the company you’re working with and the region you’re in, but the industry standard is between 15-20%.

Learn more about royalties here.

Assuming you have an active oil and gas lease, you’ll receive royalties as long as the well is producing.

If your well stops producing or the company decides to stop production on your land for any reason (market prices, oversupply, financial troubles, etc.), you will stop receiving royalties. Once the lease has expired on your mineral rights and you’re no longer under contract, you will stop receiving royalties.

If you lease your land for oil and gas production, you might receive a hefty tax bill. That’s because the IRS treats signing bonuses as ordinary income.
However, if you sell your royalties, you might qualify for long-term capital gains tax treatment.

If you’ve owned your oil and gas minerals for more than one year, the payment you receive for selling your royalties may be subject to the lower capital gains tax rate.

We encourage our landowners to talk to a certified public accountant for tax advice. If you’d like to learn more about selling your royalty, call Gateway Royalty at 330-627-4200.

So, you have a mortgage on your property, but you want to sell a portion of your royalty? Easy. At Gateway Royalty, we’ll work with your bank to find a solution that benefits everyone.

In most situations, we’ll use one of these three options:

One: We’ll pay off the mortgage in full, as long as our purchase price for the royalties is greater than mortgage on your property.

Two: We’ll subordinate the mortgage with your bank: this means getting written consent from your bank agreeing to the terms of your deal with Gateway.

Three: If the first two options don’t work, Gateway will work with you to refinance your loan with a different lender.

To discuss your specific situation, and to learn more about Gateway Royalty, call us at 330-627-4200.

If you receive an oil and gas royalty, you might end up with lower SSI or SSDI monthly benefits. If your royalty income surpasses a certain threshold, your SSDI monthly benfits will be reduced.

As of October 2011, earnings that surpass $1,000 a month are considered substantial.

The SSA disregards the first $65 to $85 that you earn, before reducing your monthly benefit by $1 for every $2 you earn from oil and natural gas royalties.

If the parcel of land is encumbered by an oil and gas lease, and you buy that property with the minerals and there’s no reservation of the oil and gas, then you would have to notify the operator of the change in ownership.

In Eastern Ohio, oil and gas production is broken down into three distinct regions where different resources are extracted. In the energy industry, these regions are called windows.

1. Dry Gas Window
2. Wet Gas Window
3. Oil Window

Different resources (or commodities) are extracted in each of these windows, and these commodities all have prices that rise and fall independently.

Oil and gas companies move their rigs based on commodity prices, and where they think the best production will take place.

Since royalty payments are tied to commodity prices and production, geography is one of the biggest factors that affect your royalty.

Gateway Royalty buys royalties throughout all three windows. To learn more about Gateway, call us at 330-627-4200.

Selling your mineral rights means that you will be pre-paid the agreed upon value of your minerals. You then have the ability to use that money as you see fit. Development of your minerals may still occur at some point, but you will have already been paid. This option is a great way to get access to money that you may otherwise never get to see or have to wait a long time to realize. This also protects you from a “dry hole” or a well that doesn’t produce.

Selling your royalty is merely selling the stream of royalties you might receive if your land were put into a producing drilling unit. The oil and gas royalty buyer cannot execute leases on your property.

A royalty buyer like Gateway Royalty is a silent partner in the background and receives money only in the event that your oil and gas minerals are drilled or pooled with a producing well.

After we’ve agreed to a price, Gateway Royalty will verify your title at the County Recorder’s office. If everything checks out and upon your execution of the necessary paperwork, Gateway Royalty will immediately present you with a check.

We are primarily interested in the Ohio counties of Carroll, Jefferson, Harrison, Belmont, Guernsey, Noble, and Monroe, all located within the Utica Shale.

However, if your land is not in these counties, we may still consider it for purchase. Talk to us!

Gateway Royalty is committed to doing business the right way. We are building a business based on honesty, fairness and respect. In buying a balanced portfolio of Utica Shale royalties across a broad region, we do hope to benefit if successful wells are drilled. At the same time, however, the result of our investment will allow landowners to reduce some of their holdings to cash, spreading the risk of being that unlucky landowner sitting on bad geology. And by only buying a portion of a landowner’s oil and gas royalties, we allow a landowner to “keep some skin in the game.”

We intend to be a part of your community for a long time. If you want to learn about the oil and gas business in the Utica Shale, come and see us! That’s what neighbors are for.

We are located off the Square in Downtown Carrollton at 111 2nd St. SW (the old Huntington Bank branch) and in St. Clairsville, just across the street from the courthouse at 116 E Main St. We look forward to getting to know you. Feel free to give us a call or just stop by.

There’s no obligation. When you give us a call, we’ll help you explore your options with your oil and gas royalty.

You’re under no obligation to sell, and all conversations are kept confidential.

Sometimes we have to explain to landowners that we’re currently not interested in acquiring their mineral interest because it just doesn’t make sense for us at that particular moment. The reason could be a number of things—what’s going on with development in that area, certain situations or trends in the oil and gas industry, or other factors our data is showing us.
But we always hold onto and keep track of landowner information. That way whenever development picks up in your area or we get a better understanding of development, we can revisit it at a future date.

This is a tough question to answer. What companies look at more than time is what’s called “reserve life”. A landowner thinks in terms of, how long is this well going to produce? Will it last for 30, 40, or 50 years? But, ultimately, that’s not what matters. What matters is maximizing the reserves under the ground in that formation for every well drilled. The operator is going to do its very best to produce the well as long as economically possible. Our best guess is that Utica Shale wells may have a 50 year reserve life based on current technology.

No, they do not. The drilling decision is entirely in the hands of the oil company and sometimes oil and gas companies let leases expire without drilling.

This is why it is good to sell your mineral or royalty interests. You’ll have money available to invest or use as you see fit, without waiting on production.