Sell Your Oil and Gas Mineral Rights

This is a great question.  It’s really hard to find a buyer for small mineral rights.  It takes nearly the same effort regardless of deal size to:

• Perform due diligence
• Run title (check prior deeds)
• Draft closing documents
• Navigate the closing process
• Have deeds recorded
• Navigate ownership transfer
• Management minerals (pay taxes, track operator changes, etc).

We buy smaller minerals, but many buyers do not.  It’s simply not worth their time.

How small is too small?

The word small is subjective.  Generally speaking, minerals generating less than $3,000 in royalties per year are classified as “small”.  However, because acquiring mineral rights can be labor and time-intensive, some buyers will not purchase minerals valued below 30K. Others might not consider properties valued at less than 250K.  It’s highly variable from buyer to buyer.

Blue Mesa Minerals specializes in smaller minerals, and we buy properties that many other buyers reject.  We specialize in acquiring minerals valued between $1,000 and $100,000 (usually between 5K and 40K).

What do I do with very small minerals?

If you can’t find a buyer for your tiny minerals (making less than $500 per year), you may want to consider donating your mineral rights. 

Yes.  Blue Mesa Minerals frequently buys minerals owned by a family trust (and even partnerships and LLCs).  The process is largely the same, but there are additional documents required.  We will need a copy of the trust agreement (or certification), showing that the trustee has the right to sell real property from the trust.

Do I need to hire an attorney to sell trust-owned minerals?

It’s always advisable to have an attorney review legal documents before you sign them, but not everyone does.  We will prepare the closing documents for the trustee (or co-trustees) to execute and guide you through the process. There is no cost to you or the trust.

I don’t share the belief that most buyers are scammers, but there are some.  Others are simply unethical (which is subjective).  Here are some things to watch out for:

• Offers that expire in 24-48 hours (we give 7 days with the option to renew).
• Buyers who charge a closing fee or commission (unless they are a broker or auction service).
• Buyers who need more than 30 days to close (they are often looking for an end-buyer or flipping minerals).

At Blue Mesa Minerals:

• We disclose we’re the end buyer (not a broker or flipper).
• We give you time to review and consult advisors.
• Pay all the title research and legal fees related to drafting closing documents.
• Our offers are valid for 7 days with the option to renew (we would offer 30 days, but the price of oil or gas could tank quickly, so we are more comfortable with renewable 7-day offers).

Sometimes.  The honest answer is that it depends on what type of title problem exists and how risky it is.  Often minerals with title problems have a lower value due to the increased risk. Here are a few scenarios:

Scenario 1: Texas minerals in an estate with no probate:

This is a common scenario, and depending on the details, we would likely still make an offer.

Scenario 2: Kansas mineral rights with no probate, and the owner passed away in New Mexico.

This one is tricky. Kansas has very strict rules about probate, so probate (and ancillary probate) may be required in order to sell minerals from an estate.  We can connect you with a Kansas attorney to help you along this process and then close on the minerals at the appropriate time.

Scenario 3: You want to sell your Oklahoma minerals you think your grandfather owned, but the ownership was never transferred to you.

There are too many potential risks in this scenario.  We would likely explore the details with you and do some preliminary research, but you may need to cure the title first.

Scenario 4:  You were forcepooled (not Oklahoma) in a way that delays any royalty payments until the well has reached a certain level of payout, which could be years – if ever.  

We’ll be happy to look into this, but in many cases, the value is much lower than expected, and we rarely buy in this situation.  Fortunately, this is not a common scenario.

Scenario 5: A company offered to buy your Colorado mineral rights, and you didn’t even know you had mineral rights. You have no idea if this is real or a scam (and no way to determine if the offer is fair).

This scenario is highly dependent on a variety of factors.  If you know the legal description and we can find evidence of ownership, we might make you an offer. However, we rarely make an offer in this situation.  Most of the time, we try to help you resolve the title yourself and get into pay status so you can receive funds in suspense and start receiving regular royalty checks.  We think this is in your best interest. After you get into “pay status”, if you still want to sell, we will be happy to evaluate your minerals and potentially make you an offer.

We are not going to tell you that we are the only ethical and honest mineral buyers in town because it simply isn’t true. There are lots of reputable buyers. Here’s what really sets us apart:

We’re Just Like You!
I’m not a landman. I don’t have an MBA. I’m entirely self-taught, and I started out like you – I inherited mineral rights and later started buying them.

We are Self-Funded
We aren’t backed by private equity or venture capital. We are entirely self-funded, using the royalties we earn to buy more mineral rights. We are spending our own money – not someone else’s!

We are Woman Owned
Blue Mesa Minerals is a woman-owned business. Our Founder and President is a woman, and you don’t see many women in the mineral acquisition space.

We Also Buy Small Minerals
Most mineral buyers turn away small minerals because of the time and cost involved. We welcome small mineral owners and treat them the same as someone with much more valuable minerals.

We Don’t Flip Minerals
We don’t flip mineral rights. We keep what we buy and use the royalties to buy more minerals.

We Focus on Education
Our goal is to educate mineral owners, so we provide graphs, maps, and background information with each offer. We want you to know what you’re selling!

This is a buyer-specific question.  We close on most of our minerals in a matter of days.  Sometimes, it might take a week, and in rare cases, where we have to order title docs by mail, it can take a couple of weeks.

In rare cases, we can make this happen the next day, but 2-4 days is more common.

Other Buyers:

Some other buyers can also close quickly, but most require 30-90 days (likely because they are not buying the minerals for themselves – they are looking for an end buyer and planning to take a cut of the deal).  It doesn’t really take all that long to run the title and prepare the closing documents.

Exception  Scenarios that Might Delay Closing:

Probate: Sometimes the seller is the personal representative or executor of an estate, and probate proceedings must begin (or be at a certain point) before closing.

Trusts: A Trustee might need to get buy-in from beneficiaries or coordinate with an attorney, both of which can take time.

Legal Consults: Some owners have their attorney review deeds and other documents before they sign (which is always a great idea).

International Closings: An international sale of mineral rights typically takes a few weeks longer than a domestic closing.

We are accustomed to working with all of these scenarios, but the vast majority of the time, we close in a few days.  

Yes, there are lots of ways to structure the sale:

• Sell a percentage (25%, 50% 75%, 75%, etc.), give you cash now, while still allowing you to benefit from future upside potential.
• Sell royalty interest only (retaining the mineral interest).
• Sell wellbore interest only (interest in one or more wells but not future wells that could be drilled).

Selling part of your mineral rights is not very common, but for some sellers, this is the solution that feels right.  We’ve had mineral owners sell half in one year and then turn around and sell the other half the next year (but the value might change).

Here are some of the factors that can decrease the value of your mineral rights:

• Title Problems
• Non-producing minerals held by production (HBP) by low-producing wells
• Leases that hold excessive non-producing acreage
• Steep decline curves
• Poor offset production (for non-producing and newly developed properties)
• Low oil and gas prices
• Operator with a poor reputation
• Leases that allow operators to have free use of oil and gas
• Poor economy or recession

The following factors will increase the value of your mineral rights:

• Clear title (expected for a market-rate offer)
• Permitted wells onsite
• Newer wells (but not too new)
• Flatter decline curve
• Favorable lease terms
• High oil and gas prices
• Operator with a good reputation
• Potential for additional wells

There are a lot of factors that go into the valuation of oil and gas royalties and mineral rights.