Why Selling Your Mineral Rights May Be Better Than Leasing

If you are planning to own/lease or if you are unclear about the benefits of selling mineral rights, below are five benefits you need to consider:

1. Selling is more beneficial than leasing
Compared to leasing, industry experts believe that selling is more beneficial for the following reasons:

-Receive 2-5 times the monetary benefit from selling vs. leasing
-Collect cash infusion immediately instead of waiting many years out for production
-Hedge the risk of non-producing assets
-No hassle, eliminate accounting, and prevent tax and income implications
-Avert impact of fluctuations in oil and gas prices

2. Knowledge on state laws
If you are considering mineral extraction, you need to have a good knowledge of mineral extraction laws in your state. Most states have laws that govern mining and drilling activities that vary from one state to another. In addition, there are also many legal issues to be aware of on ownership and production on mineral rights.

3. Reputation and track record of the leasing company
This is a very important consideration while you are leasing your mineral rights. Many companies that lease do not intend to drill well stranding owners with a nonperforming lease that they cannot escape. Potentially they may receive little or no income throughout the lease. Even if drilling occurs, it can sometimes take several years to benefit the owner making it better to sell your rights and eliminate all risks related to ownership.

4. Understanding the agreement
In most transactions, the leasing company prepares a contract for your signature. Leasing documents contain many clauses which are difficult for those not in the business to understand. There can be many potential pitfalls that can affect the owners by signing a bad lease. Mistakes can be made by an uninformed mineral owner in these agreements. Again selling eliminates the risks associated with signing bad leases.

5. Rights of surface owner
In many cases, mineral rights and surface rights are owned by two different parties. If you own both surface and mineral rights, you can benefit by selling the mineral rights but keeping the surface ownership. Basic rights are provided by the state laws. You will have sufficient protection for crops, livestock, buildings and personal property. This can help to bring in cash for the current needs but retain ownership in the surface for the long run. Read more here

If you only own the minerals you can sell the minerals and eliminate having to deal with any issues that arise with the surface owner.

Now that you are aware of the benefits of selling mineral rights over leasing make a wise informed decision. If you do sell your mineral rights, make sure that you approach a reliable company that helps you in closing the deal at a fair price without any hassles. Visit site to know more.