Sell oil and gas royalties for a lump sum

What a royalty interest is, and how it differs from mineral rights

A royalty interest is a share of the oil and gas produced from a property, paid to you without any share of the cost of drilling or running the wells. It can come with the mineral rights or stand alone. The IRS oil and gas audit guide describes it the same way: a share of production free of development and operating costs.

Mineral rights carry more. The mineral owner holds the executive right, which is the right to sign leases, and collects the bonus paid when a lease is signed and any delay rentals paid to hold a lease without drilling. When the mineral owner leases, they keep a royalty interest. If you own only a royalty interest, you're paid from production, but you don't sign leases or receive bonus or rentals.

Both can be sold. Buyers price them differently, because mineral rights can earn new lease bonuses and a royalty interest can't.

NPRI, term royalties and perpetual royalties in plain words

A non-participating royalty interest (NPRI) is a royalty interest separated from the mineral rights, often when land was sold and the seller kept part of the royalty. "Non-participating" means the owner takes no part in leasing: no executive right, no bonus, no delay rentals. NPRI owners are paid from production, cost free, like any royalty owner.

Some NPRIs are a fixed fraction of all production, such as 1/16. Others are a fraction of whatever royalty the mineral owner negotiates in each lease. The deed that created the NPRI decides which, and buyers read it closely because it changes your income.

A perpetual royalty interest has no end date and passes to your heirs. A term royalty interest lasts for a set period, often a number of years and as long after that as oil or gas is produced, and then ends. Buyers pay much less for a term royalty close to its end, so find the deed that created yours before you ask for offers.

How buyers value oil and gas royalties

Buyers start with what you receive now, then forecast how that income will change. Oil and gas prices and your lease terms move every number, because post-production deductions shrink what you're paid. For a rough range of what your oil and gas royalties might bring before you talk to anyone, try the mineral rights value calculator; firm offers come from buyers who look up the wells behind your check stub. Three things drive most offers on a royalty interest:

To see what your royalty pays each month before you compare offers, run your check-stub numbers through the oil and gas royalty calculator.

• Current income: your average net monthly royalty income over the last 6 to 12 months, after taxes and deductions.
• Decline: wells produce the most in their first years, and shale wells fall fastest. A buyer forecasts how quickly your checks will shrink.
• New wells: permits, drilling and undrilled locations in your unit can add income that today's checks don't show yet.

What to have ready before you sell oil and gas royalties

The state and county are enough to start. These papers get you firmer offers on your royalty interest, faster. If a stub's columns are a puzzle, our guide on how to read a royalty check explains them.

• Recent check stubs or owner statements, ideally the last 6 to 12 months.
• Your division order, which names the well or unit and your share.
• Your decimal interest, the long number on your stub (such as 0.00390625) showing your share of each well's revenue.
• The deed, will or court order that gave you the royalty interest.

Selling all of your oil and gas royalties or only part

You don't have to sell everything. Many owners sell a portion of their royalty interest, such as half of their decimal interest, and keep the rest of the monthly income. Others sell the royalty interest in one county or unit and keep the rest. Owners of mineral rights can sell part of their royalty the same way.

A full sale often suits owners with small checks, interests shared among several heirs, or no wish to track production and taxes every year. Keeping part suits owners who expect new wells and want a share of that upside. If you're weighing whether to sell oil and gas royalties at all, read should I sell my mineral rights, and ask a tax professional how a sale fits your situation before you sign.

How to sell oil and gas royalties through this site

GoSellMineralRights is a matching service, not a buyer. Buyers pay us for introductions; you never pay us, and asking for offers doesn't oblige you to sell. When you request offers for your royalties, this is what happens:

1. Tell us the state and county where your oil and gas royalties are, plus anything from the list above.
2. We send your request to up to three independent buyers active in that county.
3. Buyers review the wells and contact you with offers.
4. You compare them and decide: accept one, negotiate, or keep your royalty interest.

Questions owners ask