6 Factors That Determine the Value of Your Mineral Rights

Introduction

Selling ones mineral rights requires that one acquires the knowledge of the value of the mineral rights owned to ensure that the maximum possible value is quoted.

 

It is therefore important for mineral rights owners to be aware of the value of those rights which can […]

Introduction


Selling ones mineral rights requires that one acquires the knowledge of the value of the mineral rights owned to ensure that the maximum possible value is quoted.

 

It is therefore important for mineral rights owners to be aware of the value of those rights which can be facilitated by understanding the following factors. Mineral Rights

 

 


Market Participants

 

The pricing of the mineral rights is dependent on the buyers of those rights because different buyers are willing to take different levels of risk. This means that some buyers may be willing to pay a high amount of money on certain mineral rights while others may value the same mineral rights at a lower value.

 

 

Prices Of Oil And Gas


The price of oil and gas has never been constant and keeps fluctuating which affects the value of mineral rights because such rights are significantly dependent on those prices. When the oil and gas prices are high, mineral rights buyers tend to be willing to pay a high amount for the rights. On the other hand, low prices encourage low valuing of the rights, thus buyers are willing to pay low amounts for the rights. Sell Gas Rights

 


Location Of The Minerals


The value of mineral rights depends on where the minerals are situated and the production activities that take place in the area. Rights that are surrounded by wells with high productivity of oil and gas tend to have high value while those surrounded by low productive wells tend to have low value. Sell Oil Rights

 

 

Timing


The value of mineral rights is affected by timing in a significant way because they are affected by the price of oil and gas. The fluctuating nature of oil and gas prices implies that when prices are high, so is the value of mineral rights and vice versa.

 


Nature Of The Rights

 

The value of mineral rights is attached to whether the rights are producing or non-producing. Non-producing rights are those that are untapped and remain in the ground. These are valued lowly compared to producing rights which are those that are producing oil and gas and are in fact being drilled.

 


Size, Type and Demand


Large mineral rights in terms of large deposits have high value compared to small deposits. The type of mineral is also important because the value of minerals differ depending on type. When a mineral has a high demand, buyers are willing to pay more compared to that which has a low demand. Mineral Rights