Frequently Asked Questions About Oil and Gas Mineral Rights

Buffalo Geoscience works with producing and nonproducing mineral interests, royalty interests, overriding royalty interests, and select non-operated working interests.

An interest may involve one well, multiple wells, an existing drilling unit, undeveloped acreage, or a larger package of oil and gas assets.

Yes. Mineral rights may have value whether they are leased, unleased, producing or not yet producing. The lease terms, royalty percentage, deductions, operator, nearby development and remaining drilling potential can all affect that value.

Yes. Producing mineral interests are commonly sold. Their value may be influenced by recent production, well performance, commodity prices, the number and age of the wells and the potential for additional development.

They may. Value depends on the geology, location, nearby leasing and drilling activity, the operators active in the area, the likelihood and timing of future development and current buyer interest.

No. An owner may sell all of an interest or only a portion. A partial sale can provide cash now while allowing the owner to retain some mineral or royalty ownership for the future.

The reasons are different for every owner. Some want to simplify an estate, divide an inherited interest among family members, reduce paperwork, diversify their assets or convert uncertain future income into cash. Others may have a personal, business or investment use for the money. Selling is not necessarily the right decision for everyone. A current offer should be considered along with potential future income, development timing, personal financial needs and possible tax consequences.

Mineral value is not simply a county average or a standard price per acre. Buffalo Geoscience considers the geology, nearby wells, production performance, operator activity, drilling permits, unit configuration, lease terms, royalty percentage, deductions, title, development timing and current transaction activity. The objective is to understand the specific property and identify opportunities that can bring out its strongest value.

Different buyers may make different assumptions about future drilling, well performance, commodity prices, timing, title risk and investment return. Some offers may also contain acreage adjustments, title deductions, financing contingencies or other conditions. The highest number on the first page is not always the strongest offer. The price, terms, timing and certainty of closing should all be considered.