Understanding Royalties: Sell Oil and Gas Royalty Interests for Cash

"How do I know how much my royalties are worth?"

Click here to learn more about how to value your royalty.

Or give us a call and we can help estimate the value for you FOR FREE.



What are Oil and Gas Royalties?

A royalty is a right to a payment for the use of an asset by another party. For oil and gas, royalties are rights to a portion of the sales of oil or natural gas from a property. The total royalty interest on a property is typically defined in the leases signed by you and the operator who drilled and/or maintains the wells on the property. This is often a small interest, usually less than 20%, of the total revenue interest tied to the minerals. An individual royalty will be a portion of this total royalty interest.

What are the benefits of owning royalties?

Royalty interests have the benefit of receiving a portion of the total revenue from the sale of oil and gas but without being responsible for paying expenses. Working interest owners are responsible for the operating expenses tied to the well. If you own a royalty interest in a producing unit or lease, you should be receiving regular payments from the operator for your portion of the revenue brought in by oil and gas sales.

What are the risks of owning royalties?

Most royalty owners do not realize that the production from their property will continue to decline every year, though their check will fluctuate mainly based on oil and gas prices. Eventually, the well will deplete and the royalty checks will decline to $0. Furthermore, if the well that pays the royalty gets damaged and is shut in for repairs, or if the well simply becomes uneconomical to operate, the royalty payments will stop. Because of this risk, many royalty owners choose to sell oil royalty or gas royalty, trading their declining monthly cash flows into a lump-sum pool of cash they can convert to a non-depleting asset.

Should I sell gas royalty or oil royalty?

In general, royalty ownership in an oil and gas field should be looked at individually and decisions should be made on a case-by-case basis. This is why it is important for owners to understand how royalties and other oil and gas interests work. Before they sell oil royalty or sell gas royalty, many owners consider the amount of recent royalty payments, how old the lease on the property is, how reliable the operator is and how long the royalty payments might last. Another thing to consider is the current prices of oil and gas that may be affecting the size of the recent royalty checks.


Receive a Free Quote

For a risk-free quote, with no cost and no obligation, please fill out the following short form.


Energies Monitor

Latest News

  • GE combines technologies into energy efficiency company

    The General Electric logo is seen in a Sears store in Schaumburg(Reuters) - General Electric Co said on Wednesday it had started a company to focus on energy efficiency to help corporate and other customers lower their energy bills and better manage power distribution. The new company, called Current, will integrate GE's LED, solar, energy storage and electric vehicle businesses with GE's growing data and analytics platform. The company, which will be run by Maryrose Sylvester, who has been president of GE Lighting, will begin with $1 billion in revenue, and is expected to grow to $5 billion by 2020, GE said.

  • South Africa seen green energy model for the continent

    Giant wind turbines dot the landscape at the Darling Wind Power national demonstration project near Cape TownBy Peroshni Govender CAPE TOWN (Reuters) - Africa should learn from South Africa's renewable energy drive, which has led to a sharp drop in green power prices thanks to benign regulation and infrastructure investment, industry players said on Tuesday. Four years since President Jacob Zuma's government launched its renewable energy plan, it has fed over 1,000 MW of power into its strained system, which regularly plunges millions of homes into darkness and shaves about 1 percent of growth in Africa's most industrialised economy. "Africa is blessed with huge amounts of sun, wind and biomass and South Africa's example of putting in stable regulation should inspire other countries to scale up its renewable energy production," Christine Lins, the executive secretary at REN21, a green energy policy network told the South African International Renewable Energy Conference (SAIREC) .

  • CHORUS Clean Energy flat in Frankfurt debut
    FRANKFURT (Reuters) - Shares in German wind and solar park operator CHORUS Clean Energy opened flat in their stock market debut on Wednesday. CHORUS started trading at the offer price of 9.75 euros a share, which had been set at the low end of a 9.75-12.50 euro range in the 119 million euro ($133.71 million) deal, including an over allotment option. Wind park operators such as CHORUS and larger peer Capital Stage, have benefited from rising demand for energy assets, most of which offer stable returns in times of record-low interest rates. ($1 = 0. ...