Louisiana has produced oil and gas for more than a century. With Louisiana being the fifth largest producer of crude oil and fourth largest producer of natural gas in the U.S., the production of oil and gas is closely linked with the economy of the state of Louisiana. But why do some owners choose to sell their oil and gas royalties? Here are some reasons why.
Cash Needs: As reserves become depleted over time, it follows that royalty checks received will also show a decline. Instead of collecting smaller and smaller royalty checks over an extended period of time, owners often decide to convert their oil and gas royalties into one lump sum payment while getting fair market value for the property.
Estate Needs: This reason is a popular one among owners choosing to have their oil and gas interests converted to cash to provide easy transfer to future generations. These assets, if left within the estate could impose a burden on the heirs of the estate who will have to either manage or liquidate the assets and may not be prepared to do so effectively.
Economic Uncertainty: Due to the stock market’s recent swings and the “oil rollercoaster ride”, it is becoming a risk to retain oil and gas interests. Oil prices have been at record highs over the last few years. There is a real risk that further economic downturn could trigger a serious drop in prices as demand for energy falls to match a slowing demand for goods and services. Selling your oil or gas royalties and perhaps diversifying into other hard assets can provide some protection from the recent uncertainty of global markets.
Broadmoor Land & Minerals can help you through this often difficult decision of whether or not to sell. We can provide accurate information and insider perspective regarding your particular oil and gas royalties. We are an active purchaser, but our first priority is making sure that you understand the asset that you own and know what options you have. Contact us to speak to one of our team members at your convenience, and we will be glad to help you. You may fill out the form below to get you started.