We Help Universities Divest Mineral Rights
Divest from fossil fuels by liquidating oil and gas royalties and minerals rights from endowments.
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Divesting University Endowments From Fossil Fuels
Universities often lead by example, and divesting from fossil fuels is a concrete way to demonstrate a commitment to sustainability, climate action, and the future. By taking a stand on important social issues, such as fossil fuel divestment, universities can influence public opinion and inspire other organizations to do the same.
Social Responsibility
Universities are accountable to their stakeholders, including the students, alumni, educators, policy-makers, board members, and the communities they serve. These stakeholders, particularly the younger generations, are increasingly concerned about climate change and expect their universities to make investment decisions that align with social responsibility.
Long Term Perspective
Universities are durable institutions that need to plan for the long term, making fossil fuel investments particularly risky. There are also environmental risks associated with owning some types of mineral rights, and eventually, all oil and gas fields run dry, depleting the value of the asset. Divesting fossil fuels can free up funds for more sustainable and long-lasting investments.
Risks Associated with University-Owned Mineral Rights
The fossil fuel industry faces an uncertain future as the world transitions to cleaner energy sources. Carbon-reducing emission regulations, drilling restrictions, and state and federal legislation are undercutting oil and gas development, which impacts fossil fuel stocks as well as the value of oil and gas royalties and mineral rights.
Declining Royalty Revenue
Oil and gas are finite resources, and all wells eventually run dry. Rather than waiting for university-owned mineral rights to devalue completely, they can be sold, and the proceeds invested in more financially sound assets.
Anti-Drilling Regulations
Dilling restrictions, emissions regulations, and legislation reduce future drilling opportunities. Producing minerals may not be fully developed and non-producing mineral rights may never be developed. The University may be sitting on assets that could be sold and the proceeds invested in more approriate ways.
Environmental & Financial Risks
Some types of mineral rights obligate the owner to pay their share of the drilling, operating, and plugging costs. Owners may be subject to contract liability, special statutory liability, and tax liability. Many universities do not want to take on this level of risk – especially for a depleting asset.
Insurance Requirements
Some endowments require insurance on all real property – including mineral rights. It can be difficult to find insurance policies that cover mineral rights and mitigate the potential risks with some types of mineral ownership. Sometimes it can be easier to sell or donate the mineral rights and invest in a more standard asset class.
Mineral Management Can Be a Burden for University Endowments
Many universities have a portfolio of mineral rights bequeathed or donated through the years. Although the idea of a steady (albeit declining) revenue may be attractive, many universities find that they lack the expertise, time, and desire to manage mineral rights.
Some universities are large enough to have a whole department dedicated to mineral management, while others outsource the management, thereby reducing the benefit. Many smaller universities struggle to manage their mineral rights internally.
These are some of the management-related reasons that universities choose to liquidate donated mineral rights:
- Lack of mineral management expertise.
- Requires significant time to acquire and manage.
- Frequent need for costly legal services.
- Lack of bandwidth/resources to deal with minerals
- Lack of industry-specific knowledge to negotiate leases, verify division orders, audit royalty checks, keep up with operator changes, and maximize royalty revenue.
How to Sell to Blue Mesa Minerals
Blue Mesa Minerals is happy to help universities divest from fossil fuels by purchasing their oil and gas royalties and mineral rights. We buy mineral interest, royalty interest, non-participating royalty interest, and overriding royalty interest from universities, non-profits, trusts, banks, and individual mineral owners. We also accept donations of non-producing, minimally-producing, and low-value mineral rights and even those with title issues) that are nearly impossible to sell.
Our 4-Step Process
We won’t pressure you to sell your mineral rights. We are here to give you information so you can make an informed decision.
1. Inquire About Donating or Request an Offer
Request an offer. We we’ll be happy to evaluate your mineral rights and present you with an offer.
2. Submit Supporting Documents
Send us the last few months of royalty statements and any supporting documents (leases, deeds, division orders etc.).
3. Review and Accept Offer
We will review and appraise your mineral rights and provide you with a competitive offer.
4. Sign Deed and Receive Payment
Once we agree on a price, a closing date will be scheduled. You will sign and notarize the document. When we receive the paperwork, we will immediately wire the funds.
Divestment Timeframe
How long does it take to divest mineral rights?
The amount of time it takes to sell or donate mineral rights depends on who you sell or donate them to. Sometimes larger organizations have a long process, and it can take months to sell or donate your mineral rights (especially if there are title issues that must be resolved first).
Blue Mesa Minerals can usually close minerals in one to two weeks (large portfolios may take longer).
Portfolio vs On-Demand
Two ways to divest your oil and gas portfolio
Blue Mesa Minerals can take mineral rights off your place in bulk or in a one-off scenario (as they are donated to your non-profit).
Bulk:
We can acquire your entire mineral portfolio with minimal effort on your part. We will do the research, valuation, document preparation, and closing.
One-Off:
We can acquire minerals as they are donated to your organization. Simply notify us of your new donation, provide a bit of information, and we can take care of the rest.
What Documentation is Needed?
How long does it take to donate or sell mineral rights?
In order to sell or donate your mineral rights, you need documentation about the minerals. The most helpful documentation includes royalty statements, property deeds, probate documents, oil and gas leases, and tax bills.
Any of the following documents can help us figure out what you own and how to properly draft the deed:
- Royalty Statement
- Mineral Deeds
- Oil & Gas Leases
- Probate Documents
- Ad Valorem Tax Bills
Don’t have documentation? Don’t worry – we can get the necessary documents (or we can work around it).
Types of Mineral Rights We Acquire
Blue Mesa Minerals buys mineral interest (MI), royalty interest (RI), non-participating royalty interest (NPRI), or overriding royalty interest (ORRI). The only type of mineral rights that we don’t buy is working interest (WI). We acquire mineral rights from individuals, family trusts, and non-profit organizations that need to divest from fossil fuels or would rather focus on their core mission rather than mineral management.
Mineral Interest (MI)
Mineral Interest owners have the right to explore, develop, and produce the minerals below the surface of a tract of land, including the right to enter into a lease.
Royalty Interest (RI)
Royalty Interest includes the right to receive revenue from well production, without the obligation to pay for drilling, operating, or plugging expenses.
Non-Participating Royalty Interest (NPRI)
Non-Participating Royalty Interest (NPRI) includes rights to oil and gas production revenue but no rights to enter into a lease.
Overriding Royalty Interest (ORRI)
Overriding Royalty Interest is an interest in the proceeds from the sale of minerals rather than an interest in the actual minerals. ORRIs are also called overrides.
Where We Buy Mineral Rights
We buy both producing and non-producing minerals in all oil and gas states. However, we are especially interested in Texas and Kansas mineral rights.
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We even buy minerals in more obscure states, such as Michigan and Illinois, which produce a very little oil and gas compared to other states.
How We Value Mineral Rights
There are many factors that play into the value of mineral rights. These include location, producing vs. non-producing properties, current oil and gas prices, well production figures, lease terms, and even the operator of the well or wells. We also look at the risks of buying and owning minerals that you are interested in selling.
Location
Minerals in the hottest shale plays are more valuable than those in older fields with conventional wells.
Producing vs. Non-Producing
Producing minerals are often worth more than non-producing minerals because they are generating revenue.
Oil & Gas Prices
When oil and gas prices drop, revenue drops, and sometimes operators are unable to continue operating the well.
Production
Highly productive wells (and off-set wells) can increase the value of your minerals.
Lease Terms
Favorable lease terms (such as a 25% royalty reservation) positively impact the value of the leased minerals.
Operator
A small number of operators are unethical, and their reputation automatically devalues your minerals.
Why Sell?
Why People Sell Their Mineral Rights
I am putting my affairs in order. I don’t want to burden my kids with the hassle of transferring ownership and managing small mineral rights. When my sister passed away, my niece and nephew had to hire an attorney to help them with the minerals. I don’t want my kids to go through that.
I inherited my mineral rights so they were sentimental, but I don’t really want to bother with managing them and filing extra tax returns. I decided to sell and use the money as a down payment on my house.
I had no idea how fast the oil production would decline. My checks are only 20% of what they were a few years ago. I should have sold my mineral rights when the wells were brand new and still generating huge royalties.
My oil wells have been producing for decades and the reserves are almost depleted. Once the wells are plugged, the value will be significantly lower. I’d rather cash out now.
I inherited mineral rights, but don’t want to be involved with fracking and fossil fuels. I would prefer to support renewable energy and do my part to reverse climate change.