Why Consider Selling Your Oil and Gas Mineral Rights

Some of us in North America are fortunate to be in the position of having the option to sell our oil and gas mineral rights. While some have committed themselves to holding onto these precious yet possibly less valuable rights, others are looking into selling these rights while the market is hot. If you are considering selling your oil and gas mineral rights, below are just some of the reasons why we at H&M Land and Mineral recommend letting them go:

No More Paperwork

Managing your mineral interests is time-consuming. It requires a lot of paperwork, a lot of documentation, and quite a bit of money to keep in order. If you’re looking to ease your burden (especially at tax time), then selling off your oil and gas minerals may be in your best interest.

Better Tax Rates

If you have owned oil and gas assets for more than a year and choose to sell them off, then the long-term capital gain proceeds that are received by you are taxed at a maximum of 20%. Bonus and royalty income tax rates can escalate to as high as 39%, depending on your tax bracket.

We always recommend that potential sellers speak with their accountant about how they can make the most out of selling their oil and mineral rights to our company. They will be able to look at your specific situation and lay out the pros and cons so that you can make the best choice for your financial situation.

A Continually Depleting Asset

Regardless of how much your well or mine may be producing today, eventually your production levels will drop and dwindle until you need to close up shop and look elsewhere for oil and gas. At this point, your oil and gas mineral rights are worthless and will be of zero value.

No one can predict with exact certainty when a well or a field will dry up and no longer produce. This is why many will eventually consider converting some if not all of their mineral properties into other long term value-driving assets, such as:

  • Stocks
  • Bonds
  • Real Estate
  • If your well or field has been producing well for a lengthy period of time, consider yourself fortunate. Many oil and gas mineral owners in the United States and some parts of Canada whom we have consulted with have had their resources dry up significantly sooner than they thought possible. If you are considering selling your mine or field, contact us here at H&M Land and Mineral for a hassle-free, no obligation offer so that you can get an idea of what your assets are worth today and whether it would be profitable to sell them.

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