Why Sell

  • Monetize your interest A large lump sum payout for a non-producing interest that can serve as a hedge against the inherent risks of oil and gas exploration. Or a large lump sum payout for a producing interest rather than monthly, quarterly or yearly checks.
  • Elimination of Paperwork The sale of oil and gas properties can help eliminate the necessary maintenance of depletion schedules and property tax records. In addition, selling could simplify a federal income tax return, the paperwork, and financial record keeping associated with owning oil and gas properties can be cumbersome and tedious for anyone not dedicated to this type of asset management.

    Also, the sale of properties held in a trust or estate would help eliminate associated expenses as well as the need to maintain separate bank accounts. It would also allow for the elimination of monthly distributions and their associated tracking, as well as, simplifying tax returns.
  • Fractionalization As minerals and royalties are handed down generation to generation, they become increasingly fragmented. Over time this exponentially dilutes ownership, decreasing the economic benefit to each generation, and creates more paperwork.
  • Depleting Asset All oil and gas properties are depleting natural resources, not appreciating financial assets. Selling allows for the proceeds to be re-directed to appreciable assets.
  • Risk Management Oil and gas assets are subject to many different types of risk, these include: fluctuating commodity prices (e.g. alternative fuels, fluctuating supply/demand, weather, and economic cycles), drilling risk (dry holes or marginal producers), production declines (in some cases could be rapid and sudden).

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