The fourth largest oil producing state in the U.S. and the center of the tight-oil transformation is North Dakota. When North Dakota first established its relationship with oil in 1951, it brought about opportunities for residents, farmers and businesses. However, mineral rights in the area did not have much value until the discovery of the Bakken Shale formation. Since then, it has created a vast wealth for many farmers who own most of the mineral rights in North Dakota. Back in 2011, North Dakota’s economy had the fastest growth in personal income, jobs and real estate prices in the country. As the exploration and extraction of North Dakota minerals has continued to expand, the unemployment rate has become the lowest in the nation.
There is no doubt that North Dakota has been a great place for mineral owners who have enjoyed income from royalty interests. After more than half a century since the discovery of oil in North Dakota, more and more people are beginning to ask themselves if the Bakken formation still continues to provide economic fortune for people. As professional oil and gas asset managers, we enjoy the booms in new markets, but we always remind ourselves to be realistic about individual wells and properties.
Oil and gas royalties will often last for decades. But considering that oil and gas wells will deplete, the current value of those royalties on any given day, and thus the money that could be received from the sale of oil and gas royalties, will drop consequently over time. The average well is thought to last 35 years, but it is often very difficult to determine the future of a particular well or set of wells without sufficient industry expertise.
By selling your interests now, you will no longer need to worry about the decline of your royalties, which is unfortunately inevitable given that all oil and gas wells eventually quit producing. At Broadmoor Land and Minerals, we rely on the experience and expertise our team of petroleum engineers and financial professionals to analyze the royalty interests that we purchase in order to get a clear understanding of the remaining future production. We then carefully manage each purchased property to make sure that each interest reaches its peak potential.
Owners decide to sell oil and gas royalties for numerous reasons. Many have taken advantage of recent booms while they know prices are high. Some have inherited their royalties and are simply not interested in oil and gas, or would simply prefer having the cash up front rather than a string of future payments. Tax regulations can often play a role in the decision as well. For instance, many those who decided to sell their royalties no longer worry about property taxes on the minerals, or income taxes on the royalty payments. Many owners only pay the capital gains tax rate on the sale proceeds, which is a much lower tax rate than the income taxes owed on monthly royalty payments.
With energy prices at an all time high, now is an excellent time to convert royalty interests into cash and liquidate. Broadmoor Land & Minerals offers the most competitive offers in the industry and we provide owners with a free, no obligation offer. You may contact us by calling us, or by filling out the form below and we will get back to you immediately.