How Do You Sell Your Mineral Rights?
Posted October 15, 2019
People sell their mineral rights or royalties for a lot of different reasons. Some are facing financial challenges. Others just want to live a life of more financial freedom. Some want the ability to explore new opportunities. While others plan to use the money for new investments.
Whatever their reason for selling, one of the biggest questions people have when they first begin to look into selling their mineral rights or royalties is: How does this process work? It’s a valid question. When you’re thinking about selling something associated with your property—even if it is any oil or gas that might be found deep below the surface—you want to know what you’re getting into. How much work is required on your end? What will the steps look like along the way? When will you get paid if you decide to sell?
To take some of the mystery out of the proceedings, we wanted to share our process when we work with landowners interested in selling their mineral rights. While we can’t speak for every mineral rights buyer out there, we can tell you how we operate at Gateway Royalty. We can also tell you we do everything we can to make the process as simple and stress-free for our landowners as possible.
What the Process of Selling Your Mineral Rights Looks Like with Gateway Royalty
Considering selling your mineral rights? Here’s a quick summary of what the process looks like from our first conversation until the sale is complete.
1. You contact us
Once we hear from you, we reach out to start a conversation and answer any questions you may have. We can work with you in-person, over the phone or via email. In some cases, we never actually meet the landowner (the whole deal is done through phone calls and emails). In other cases, we do the entire deal in your living room, face-to-face. It all depends on how you prefer to communicate.
2. We review your property
We analyze your property to determine its projected value in terms of oil or natural gas production. This includes finding out your property’s land size, geology, oil and gas operations in the area, infrastructure in the area, any leasing that has taken place with oil and gas companies (on your property or nearby), what part of “the play” or “window” you’re located in, and other significant factors that can impact value. Here’s some additional information on how we determine what your minerals are worth.
3. We make you an offer
Based on what we learn about your property and it’s potential to produce oil and gas royalties, we may make an offer to purchase your mineral rights. The offer is delivered in writing. From the time we have our first conversation with you, it usually doesn’t take us too long to do our research and put together an offer (typically less than 24 hours). We have a tremendous amount of data compiled, which enables us to get you an offer really quickly.
4. You agree to the offer terms
After the offer is made—if you choose to accept it—we’ll finalize the details and get them in writing. Of course, if you don’t like our offer and choose not to accept it, that’s fine too. We hope you’ll tell us why you came to that decision—but we’ll respect your decision no matter what it is.
5. We prepare two documents
Once we’ve agreed to terms on a sale, Gateway Royalty puts together two documents: (1) a contract verifying that we are paying you the agreed-upon amount, called “the order of payment”, and (2) the deed to the mineral rights. You and a representative of Gateway Royalty sign both these documents, agreeing to move forward with the deal.
6. We check your property title
Once the documents are signed, we have experts who will go to the courthouse in the county where your property is located to conduct a title search (this is an exhaustive process that looks back on every sale of your property since it was patented by the U.S. government). This is essential to confirm that you own the mineral rights on the property. Since mineral rights and surface rights to a property can be sold separately, there are cases where landowners believe they own the mineral rights but actually do not. We have to verify that your mineral rights are in fact yours to sell.
7. You receive a check
Once a title search is complete (and confirms you are the rightful owner of the mineral rights), we hand you a cashier’s check for the total amount of the sale.
8. We file the deed at your local courthouse
Gateway Royalty handles this last piece of the process—which is just making sure the paperwork is filed. Recording the deed at the courthouse completes the sale.
How long this process takes from beginning to end can depend on a number of variables—including how fast you want the process to go. In some cases, mineral rights sales can be completed in as little as one business week. In others, landowners prefer to take a little longer to make their decision.
It’s Always a Good Idea to Gather Information & Explore Your Options
Sometimes the “unknown factor” keeps landowners from learning more about selling their mineral rights. Because they don’t know what’s involved in the process, they’re hesitant to even explore the option. Don’t make that mistake. It’s always a good idea to learn more about the process and benefits of selling your mineral rights to find out if it’s the right choice for you. After all, you can’t effectively weigh your options if you don’t have all the information.
If you live in Ohio and you’re interested in exploring the possibility of selling your mineral rights, reach out to Gateway Royalty today. We’d love to have a conversation with you!