Wyndham Land Services is your resource for information about selling your producing mineral rights. Below, we’d like to share some answers to the most common questions we receive about our services.
Mineral Royalties
- Mineral Royalties are payments received by an individual as a result of the production of oil, gas, or any other valuable substance from beneath the earth’s surface. Within an Oil and Gas Lease Agreement, the amount of which a mineral royalties owner receives is designated usually by a percentage of the overall value of the minerals produced.
- Each month, the owner of producing mineral royalties receives their share of the profit the oil and gas company earns by extracting and bringing the valuable resources to the market. Mineral royalties can be purchased, gifted, or passed down between individuals. They are perpetual and usually exist until the property or well is stripped completely of its resources. Mineral Royalties are considered real property by the eyes of the federal tax system, and are therefore subject to taxation. With this in mind, the sale of mineral royalties are eligible for a 1031 exchange.
Producing Working Interest
- Producing working interests are similar to mineral royalties, but there is a key difference that makes them unique. A producing working interest, also known as an operating interest, is the percentage ownership an individual has of the entire operation of production.
- So unlike in a mineral royalty, in which an owner’s interest payment is strictly based on the minerals produced from the operation, owning a producing working interest share means that you own and are liable for costs associated with the exploration, drilling and production of the minerals.
- With producing working interest, more is at stake as owners are directly liable for both the costs and risks associated with mineral production. If the operation proves to be successful, however, owning and selling producing working interests can be highly profitable.
Get Started Today
If you are interested in selling your Mineral Royalty or Producing Working Interest, Wyndham is interested in speaking with you. Contact us today to learn more about how our company can help you get the most value from selling active mineral rights.
Wyndham’s team of industry experts help Mineral Royalty and Producing Working Interest owners sell their assets at the absolute best value.