Buying oil and gas royalties or interests is an amazing investment preference for medium, as well as small investors. This is partly because the returns from the investment can range from 12% to 30%. It is also because small investments like from the one-man shops can start with the business if they have some knowledge about the oil and gas industry and the prevailing trends.
Below you will read about how oil and gas royalties can be bought – Advice from an experienced royalty purchaser. For simplifying the methods below, we must assume a few givens, namely:
1. You have already knocked on a lawyer’s door and asked for legal advice concerning the trade of mineral royalties such as the laws concerning oil and gas from Geary, Porter and Donovan (Dallas). One other door you can knock is of Philip Mani (San Antonio).
2. You must have a recognized legal body to purchase the royalties of natural commodities which can either be a partnership, under your own name or a company.
3. You either have a war trunk or you have acquired finance for buying oil and gas royalty interests.
Anyone who has selling oil and gas royalties means that they are the owners of mineral rights. In uncommon cases, this scenario fails to be true but you might often come across ‘mineral rights’ and ‘oil royalties’ being used interchangeably.
Buying mineral rights or royalties happens in clearly-defined steps:
• Step 1-- Find probable royalty holder sellers
• Step 2-- Ask the sellers with an offer to buy their mineral royalties
• Step 3–Do accept incoming calls from traders with questions.
• Step 4-- Quickly complete due diligence on landowners who consider selling
• Step 5-- Send out paperwork and mineral deeds to those sellers who consider selling their mineral royalties. Follow up on these sellers straightaway.
• Step 6-- After receipt of deeds and paying the royalty seller, file the sale-purchase deed with the particular county courthouse.
Below you will read about how oil and gas royalties can be bought – Advice from an experienced royalty purchaser. For simplifying the methods below, we must assume a few givens, namely:
1. You have already knocked on a lawyer’s door and asked for legal advice concerning the trade of mineral royalties such as the laws concerning oil and gas from Geary, Porter and Donovan (Dallas). One other door you can knock is of Philip Mani (San Antonio).
2. You must have a recognized legal body to purchase the royalties of natural commodities which can either be a partnership, under your own name or a company.
3. You either have a war trunk or you have acquired finance for buying oil and gas royalty interests.
Anyone who has selling oil and gas royalties means that they are the owners of mineral rights. In uncommon cases, this scenario fails to be true but you might often come across ‘mineral rights’ and ‘oil royalties’ being used interchangeably.
Buying mineral rights or royalties happens in clearly-defined steps:
• Step 1-- Find probable royalty holder sellers
• Step 2-- Ask the sellers with an offer to buy their mineral royalties
• Step 3–Do accept incoming calls from traders with questions.
• Step 4-- Quickly complete due diligence on landowners who consider selling
• Step 5-- Send out paperwork and mineral deeds to those sellers who consider selling their mineral royalties. Follow up on these sellers straightaway.
• Step 6-- After receipt of deeds and paying the royalty seller, file the sale-purchase deed with the particular county courthouse.
Here is every step in detail to help you understand more clearly:
• Step 1 – Find Mineral Royalty Owner Sellers
You need to find likely royalty sellers. Does it sound simple? Yes, it is. However, doing it practically is an entirely different story. In fact, the major problem being the royalty purchaser, in buying oil and gas royalty interests is finding the owners who will be ready to sell their mineral royalties to you. This is like directly heading into a dead end before even starting, which happens with most people.
Here are a few places where leads can be found on royalty sellers:
Division Orders: If you are a proud owner of royalties already, then you may have a Division Order with you. These documents are a proof of the share of royalty that each party will receive, based on a series of calculations. Some petroleum companies send a document mentioning only your share while others randomly ship the division order with all the other owners. If you are the lucky one and possess a division order, you will use the addresses and names mentioned in it as leads. If you do not possess one of these, you will have to go for the option below.
Accessing Mineral Royalties Owners’ Database through a Data Merchant: Currently, the only existing gas and oil royalty data merchant in the market is the Austin, Texas based firm, Blackbeard Data Services. Their database consists of all information about Kansas and Texas mineral royalty owners. They can provide names of more than 4 million royalty owners, which is enough to proceed further.
• Step 2 – Make Your Offer
The information you have collected from Blackbeard Data or from division orders should consist of the following:
o Lease Name
o Percentage of Royalty
o Value of Royalty (This may have to be derived)
o Owner’s Name
o Owner’s Address
This is enough to distribute offers. Generally, a royalty purchaser will mail out several thousand letters to royalty owners, containing offers, counting on data to come.
Here are three distinct ways to make offers:
a. Send an offer letter with no draft.
b. Send an offer letter with bank draft.
c. Send a letter conferring your interests in buying mineral royalties with no offer.
You can go for a single way for particular type of offers like for small offers, (a) is recommended, while for medium offers (b) is recommended. For giant acquisitions exceeding over $500,000 in value, (c) would be the best method of contact. These recommendations are based on an experience of over 13 years of discussions with the energy industry.
• Step 3 – Roll Them In
You can and, probably should expect at least three replies from every thousand letters sent. It is correct because a 0.3% answer in Texas is normal. The responses received are not closings, but merely calls. Now, it is up to you that how you close will be the deciding factor of you buying mineral from either one out of the three or two out of those. In my opinion, I would count on half of the replies closing with you. To increase the odds of your closing, you need to pick up calls as soon as they ring and make sure that the receiver is always a human being rather than an automatic voicemail. You need to provide them with answers, reassure them that you are a true royalty purchaser who is really interested, and also confirm that you will close in seven days and their money will be wired to their accounts.
Firstly, you should inquire about whether the ones you have telephoned or contacted by other means are shopping their mineral royalties to some other probable royalty purchaser. If they are not, then you will be able to buy the royalties cheaper, most likely 30 to 40 months of production (monthly royalty check x 30). If they are wise and manipulating the market for other buyers, then they will be looking for 60 to 70 months of production. This is the time when you need to confer their expectations for the purchase. Give them the chance to speak first.
• Step 4 – Screen Your Royalty Seller
A clever proverb goes like “Trust no one alive, and walk carefully around the dead” when we talk about two things together, i.e. money and human beings. It certainly brings out the worst in us. You need to confirm whether the royalty they are selling in fact belongs to them. This is very simple, as they will have to send you only the last four months of pay for royalty or if the acquisitions are really expensive, a quick trip to the courthouse for examination will do. Whatever you have in mind to confirm the authenticity of the seller, you will have to act fast before they change their mind or shop their royalty to someone else.
• Step 5 – ACTION!
Once you are close to 100% sure and confident enough that this is the royalty you want, call the seller, tell them your offer and wait for their acceptance. After doing this, FedEx the paperwork. The paperwork discussed here will depend on the legal advice, but will also include some sort of mineral deed. A likely 24 hours ‘timeline after they have received it, call them to confirm the receipt, but this call will actually be an attempt to keep the ball rolling before they change their requirements, or reject the offer altogether.
• Step 6 – File with the Court of law
Your legal team is there to advise you on which legal paperwork to sign once you receive them back and the next step would be paying to the seller. Possibly, you will be paying with escrow or some other trusted form. Either way, once the deed has been signed, close it. Next, you need to file the deed with the court of law and contact the firm that was paying out the royalties to the former royalty owner. You will most probably receive your monthly checks after the third month of ownership of the mineral royalties. Longer waiting interval may be possible, and it is not uncommon considering the bureaucratic delays.
Uni Royalties Limited is the reliable source to evaluate your gas and oil lease for intensifying your asset withdrawal. Uni Royalties specializes in prompt evaluations, handling of gas and oil investment leases, providing comprehensive and quality solutions on behalf of investor and also helps royalty purchasers in buying profitable royalties.Visit them for a chat as this business ranks as one of the trusted royalty purchasers of gas and oil royalty interests nationwide.Visit www.uniroyalties.com/royalty-purchaser
• Step 1 – Find Mineral Royalty Owner Sellers
You need to find likely royalty sellers. Does it sound simple? Yes, it is. However, doing it practically is an entirely different story. In fact, the major problem being the royalty purchaser, in buying oil and gas royalty interests is finding the owners who will be ready to sell their mineral royalties to you. This is like directly heading into a dead end before even starting, which happens with most people.
Here are a few places where leads can be found on royalty sellers:
Division Orders: If you are a proud owner of royalties already, then you may have a Division Order with you. These documents are a proof of the share of royalty that each party will receive, based on a series of calculations. Some petroleum companies send a document mentioning only your share while others randomly ship the division order with all the other owners. If you are the lucky one and possess a division order, you will use the addresses and names mentioned in it as leads. If you do not possess one of these, you will have to go for the option below.
Accessing Mineral Royalties Owners’ Database through a Data Merchant: Currently, the only existing gas and oil royalty data merchant in the market is the Austin, Texas based firm, Blackbeard Data Services. Their database consists of all information about Kansas and Texas mineral royalty owners. They can provide names of more than 4 million royalty owners, which is enough to proceed further.
• Step 2 – Make Your Offer
The information you have collected from Blackbeard Data or from division orders should consist of the following:
o Lease Name
o Percentage of Royalty
o Value of Royalty (This may have to be derived)
o Owner’s Name
o Owner’s Address
This is enough to distribute offers. Generally, a royalty purchaser will mail out several thousand letters to royalty owners, containing offers, counting on data to come.
Here are three distinct ways to make offers:
a. Send an offer letter with no draft.
b. Send an offer letter with bank draft.
c. Send a letter conferring your interests in buying mineral royalties with no offer.
You can go for a single way for particular type of offers like for small offers, (a) is recommended, while for medium offers (b) is recommended. For giant acquisitions exceeding over $500,000 in value, (c) would be the best method of contact. These recommendations are based on an experience of over 13 years of discussions with the energy industry.
• Step 3 – Roll Them In
You can and, probably should expect at least three replies from every thousand letters sent. It is correct because a 0.3% answer in Texas is normal. The responses received are not closings, but merely calls. Now, it is up to you that how you close will be the deciding factor of you buying mineral from either one out of the three or two out of those. In my opinion, I would count on half of the replies closing with you. To increase the odds of your closing, you need to pick up calls as soon as they ring and make sure that the receiver is always a human being rather than an automatic voicemail. You need to provide them with answers, reassure them that you are a true royalty purchaser who is really interested, and also confirm that you will close in seven days and their money will be wired to their accounts.
Firstly, you should inquire about whether the ones you have telephoned or contacted by other means are shopping their mineral royalties to some other probable royalty purchaser. If they are not, then you will be able to buy the royalties cheaper, most likely 30 to 40 months of production (monthly royalty check x 30). If they are wise and manipulating the market for other buyers, then they will be looking for 60 to 70 months of production. This is the time when you need to confer their expectations for the purchase. Give them the chance to speak first.
• Step 4 – Screen Your Royalty Seller
A clever proverb goes like “Trust no one alive, and walk carefully around the dead” when we talk about two things together, i.e. money and human beings. It certainly brings out the worst in us. You need to confirm whether the royalty they are selling in fact belongs to them. This is very simple, as they will have to send you only the last four months of pay for royalty or if the acquisitions are really expensive, a quick trip to the courthouse for examination will do. Whatever you have in mind to confirm the authenticity of the seller, you will have to act fast before they change their mind or shop their royalty to someone else.
• Step 5 – ACTION!
Once you are close to 100% sure and confident enough that this is the royalty you want, call the seller, tell them your offer and wait for their acceptance. After doing this, FedEx the paperwork. The paperwork discussed here will depend on the legal advice, but will also include some sort of mineral deed. A likely 24 hours ‘timeline after they have received it, call them to confirm the receipt, but this call will actually be an attempt to keep the ball rolling before they change their requirements, or reject the offer altogether.
• Step 6 – File with the Court of law
Your legal team is there to advise you on which legal paperwork to sign once you receive them back and the next step would be paying to the seller. Possibly, you will be paying with escrow or some other trusted form. Either way, once the deed has been signed, close it. Next, you need to file the deed with the court of law and contact the firm that was paying out the royalties to the former royalty owner. You will most probably receive your monthly checks after the third month of ownership of the mineral royalties. Longer waiting interval may be possible, and it is not uncommon considering the bureaucratic delays.
Uni Royalties Limited is the reliable source to evaluate your gas and oil lease for intensifying your asset withdrawal. Uni Royalties specializes in prompt evaluations, handling of gas and oil investment leases, providing comprehensive and quality solutions on behalf of investor and also helps royalty purchasers in buying profitable royalties.Visit them for a chat as this business ranks as one of the trusted royalty purchasers of gas and oil royalty interests nationwide.Visit www.uniroyalties.com/royalty-purchaser
UNI Royalties, Ltd.
P.O. Box 1959
Parker CO 80134
Toll Free: 1-888-916-0220
Local Phone: 1-720-663-1187
e-mail: sellroyalties@gmail.com
