We recognize it's a personal decision. There are many reasons to consider it.
Consider it for the substantial payment.
If you are a long-term owner, the payment would be subject to long-term capital gains tax, significantly lower than the tax rate on royalties.
You avoid the risks of future non-development, a depleting reservoir, higher tax rates, and falling commodity prices.
The flexibility of using the payment for other needs, including diversifying your investments.
It can simplify your life, and your estate.
One way to think through this is to project the value of your mineral resources in the future, and compare the value to receiving payment now and reinvesting it. What we know is that production typically declines over time. These charts show you that rate of decline and the risks of ownership.
In some cases, it may be beneficial for you in the long term to capitalize on a portion of your asset now. By selling a portion of your mineral or royalty interest, you receive an up-front cash sum while continuing to maintain an interest in the minerals for any future production.
Not necessarily. Each seller needs to talk to his or her own tax advisor, of course, to understand tax impact and the difference between ordinary income and capital gains. It’s possible that you will have tax advantages by receiving a lump sum capital gain, rather than royalty income.
We are happy to provide you a list of CPAs in Big Spring or Midland who can advise on this “lump sum versus royalty income” issue and how it might apply to your individual situation.
Unfortunately, and despite what you may hear elsewhere, there is no simple or do-it-yourself formula we can provide on our website for you to plug in numbers and get "the value."
Key factors we take into account when evaluating a property include location of the asset, drilling activity in the surrounding area, the operator who owns the lease on the property, and estimated timing of any future production.
If you are interested in hearing more details, our knowledgeable team would be pleased to walk you through our process, step by step.
In short, expertise is needed to assess the value. We have a proprietary process to make projections about future production from a lease, and we rely on that methodology to determine how much we can pay today for future expected production. The precision of our modeling process and the quality of the data we use allow us to offer some of the highest prices for minerals. That said, we have no guarantees about the future, and we are taking risks, too.
If you’re currently receiving royalties, be aware that production typically declines, and your mineral resources will naturally diminish over time. So, you need to project the value of your mineral resources into the future. We can help you do that and help you compare that value to the invested value of a current payout.
There are many reasons. If you choose to unlock the value of your mineral, surface, or water assets today, Expedition funds promptly at the agreed upon price, with no games.
The primary reasons to work with us: we’re ready to expedite a free evaluation of your property, we have extensive knowledge on the basin, and we’re trustworthy.
It’s not an uncommon situation. Expedition can accommodate your desire to work together with your group of sellers, or independently.
Members of our team have bought and sold over 50,000 net mineral acres (NMA). We have seen and handled all the complexities that may be involved in mineral rights and royalty interest deals, including successfully addressing issues involving overriding royalty interests (ORRI) and non-participating royalty interest (NPRI). In the Permian Basin alone, we have handled over 800 individual transactions with landowners, including your neighbors.
No. We are primarily focused on Howard and Martin counties in the Permian Basin, but we are also involved in transactions throughout the United States. You may be a landowner with properties in multiple states. We have the financial strength and the experience to evaluate your properties, and we will be interested in speaking with you about any of your properties.
Once we submit our offer, with supporting facts, in an offer letter, the next step is to answer any questions you have. The offer letter contains the full terms of a sale – purchase price, effective date, closing date, and Expedition’s responsibilities.
After that, if the offer is accepted, we will create the necessary documents to close the deal, and we will subsequently handle any closing costs, recording fees, etc.
Another advantage of working with Expedition is that we have already completed title verification – a mineral rights title search - to confirm your ownership. This allows us to make an accurate offer from day 1 and be prepared to close as soon as you are ready to move forward.
Closing is the last step! Once the deed is in place, Expedition will promptly fund the transaction, straight to the account of your choice.