Sell Your Utah Mineral Rights
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Utah Mineral Rights
A brief overview of oil and gas activity
In Utah, most of the oil and gas development is in the northeastern part of the state, in the Uinta Basin located in Uinta, Duchesne, and Carbon Counties. Duchesne produces oil, while Uintah and Carbon counties produce natural gas.
According to ShaleXP, Utah ranks 12th for oil and gas production in the United States with over 10,000 wells that produce 1.11% of national daily oil and 0.71% of daily natural gas. Utah’s hydrocarbon production is minuscule compared with Texas, New Mexico, Oklahoma, and other oil and gas producing states.
The top 5 oil and gas producing counties in Utah are:
1. Duchesne County
2. Uintah County
3. San Juan County
4. Carbon County
5. Sevier County
Image Description: Utah oil and gas development map from Mineralanswers.com.
Image Description: Utah oil and gas well locations.
A Brief History of Oil & Gas Development
The Bureau of Land Management (BLM) manages 42% of the land in Utah. In fact, most of the oil and gas development takes place on federal land or land that is pooled with federal land. This means that Utah mineral owners are heavily impacted by the Biden administration’s recent ban on federal drilling.
Utah is one of a dozen states suing the Biden administration over the ban. Even if they are successful in overturning it (or gaining an exception), the anti-drilling sentiment is growing among the US population, and it seems likely that these types of regulations will continue.
Regardless, it is still possible to sell your producing Utah mineral rights. Non-producing minerals will be more difficult to sell because of the federal drilling ban.
Locating Your Utah Mineral Rights
You can look up your Utah mineral rights using the BLM’s Utah Interactive Map or the Utah Department of Natural Resources Division of Oil, Gas and Mining’s (UDOGM) interactive GIS map.
Each state has a different GIS map, and some are easier to use than others. Fortunately, Utah’s GIS map is very easy to use. You can look up a well that appears on your royalty statement or the legal description on your deed.
Need help? Contact us, and we can usually look it up for you. We use these tools all the time, so they are second nature.
Image Description: Utah UDOGM interactive GIS map.
How We Value Utah 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.