We buy minerals. But more than buying minerals, we help people.
Helping people is our drive. It’s our passion.
Unfortunately, the oil and gas industry has a decidedly negative opinion about everyone on both sides of mineral the mineral transaction table.
The same people who complain about oil and gas opponents in the news turn around and play the role of activist making waves in their own industry.
They don’t understand the impact a lump sum payments can mean to a landowner. As a result, they paint with broad strokes calling anyone who buys minerals a crook, and anyone who sells them, greatly misled.
Nothing could be farther from the truth.
On a whole, the professionals delivering the “we buy minerals” message are good, honest people just like their colleagues in any other segment of this industry. Likewise, mineral owners are not fools. Many of them come from families who have handed down mineral rights for generations. Admittedly, we deal with our share of people who are not experts in the field.
But, you don’t have to be an oilfield expert to appreciate the value of a lump sum payment. Especially if you are an investor, an operator who understands the risk of maintaining your mineral interest, or someone in a life or death situation.
Let’s dig in and look at a few stories from people we have helped along the way. Decide for yourself if these people made terrible decisions for their lives.
We Buy Minerals, But We Know It’s Not for Everyone
The fact is that even though I have been in this industry for over 30 years, I don’t know what the best decision is for you. I don’t live your life, and I can’t tell you whether it’s better to do this or that.
It’s not a good fit for everyone, and we respect that.
As long as we educate people and demonstrate our offer is fair and honest while offering substantive information that backs up the numbers, we have done our job.
It’s pretty straightforward. We base our numbers on similar drilling patterns, activity in the area, and market prices. Not everyone decides to move ahead, but that doesn’t mean there is no value in telling people we buy minerals.
We Buy Minerals, But Why Would Investment Property Owners Sell?
A man who owned several rental properties recently approached us about a transaction. He had a string of bad tenants who did not take good care of his property. The places were in such rough shape he wasn’t able to place anyone in the properties to rent.
His constrained cashflow meant he needed some money to put back into the properties. He wanted to build his asset back up to solve the problem. He found a perfect solution in selling half of his mineral interests.
This gave him the lump sum he needed up-front to get people back in the properties. Which means he is well on his way to solving his cash flow issues, and he still has a steady revenue stream from the other half he didn’t sell.
A lot of mineral owners don’t realize they don’t have to sell everything. Selling a portion of your mineral rights might make sense if you are the kind of person who likes to hedge his bets. It gives you the money you need today, while still allowing you to play both sides of the fence.
Others have come to us in similar situations.
Another client took a similar tact several years ago. He sold half of his mineral interests under a 20 acre tract. We didn’t hear from him for a while. Wouldn’t you know, the moment I wondered how he was doing, my phone rang.
“Laura, that was the best decision I’ve ever made.”
Wow. That’s fantastic. What do you mean?
“I took that money and bought some land. I turned it into a trailer park. Would you believe I sold that trailer park the other day and I tripled my money? If I hadn’t sold half my minerals I couldn’t have done that.”
Do these sound like ignorant decisions of blindly misled mineral owners, or savvy investors with a plan?
We Buy Minerals, But Why Would an Operator Sell?
We have written before about how owning mineral rights is a serious responsibility. Landowners have to be proactive. If somebody doesn’t get paid or somebody doesn’t get leased, then it falls on them.
This creates a risky environment. You are constantly pushing uphill through a haze of uncertainty, timing issues, and the simple reality that your 10 acre tract might not be worth the time you have to put into maintaining it.
This was the case for a past client who also happened to be a small independent oil and gas operator. He wanted out from under the hazard of responsibility. He had enough on his plate managing his own drilling programs. From his perspective, keeping the minerals in his portfolio didn’t make sense.
Not only was his plate overloaded with projects, he could see deflation was devaluing his asset on a daily basis. He knew the dollar he got today was worth a heck of a lot more than the dollar he might get in 1, 5, or 10 years.
After running the cost-benefit analysis on paying a flat 20% capital gains tax vs. possibly 30%-40% in annual income taxes PLUS State income taxes, he was convinced it was the right move.
We Buy Minerals, But Why Would Someone in a Medical Emergency Sell?
While we absolutely love working with every person who comes through our door, we take special joy in helping our clients who need it the most. We could write a book (a real tearjerker!) about the hundreds of mineral owners we’ve worked with over the decades who brought us into their lives in the most intimate ways.
People who went from not having gas money to come to the closing to leaving in tears. Real people with real problems that needed help. One that weighs heavy on my heart every time I think of him called us from a hospital bed.
“Look Laura, I need a liver transplant. We’ve tried everything, but insurance will not cover it. I need $5,000.”
It was a time crunch and we didn’t even know if we could make it happen in time. Nevertheless, we dug in against the clock.
“I don’t know what I’m going to be able to pay or what your value is, but I know that it’s at least $5,000.”
It turned out he was both an heir to mineral interests, and a very successful land owner who methodically acquired minerals throughout his life. We were able to compress what should have taken 2-3 months into a matter of weeks.
He got his liver transplant. And we got the opportunity of a lifetime to literally change someone’s life.
Setting the Record Straight
It can be frustrating to look around the industry and hear so many disparaging comments about those who buy and sell minerals. But, maybe that’s partly our fault.
We who buy minerals haven’t been very good at sharing stories like this.
If nothing else I hope to have put a human face on our little corner of the industry today. Yes, just like any other industry, there is a fractional percentage of companies in this niche who are only out for themselves.
Personally, I get out of bed each day excited to transform lives and livelihoods. Maybe if enough of us in this space shared the stories behind the transactions we could change public and industry perception for the better.
What’s Your Story?
Do you have a life-changing mineral sale story? We would love to hear it. Please leave a comment below!