Oil And Gas Royalty Investments: A Win-win Investment
There seems to be a lot of confusion rising with talks about oil and gas royalty investments
. While most investors are more than willing to give gas investment a chance, some would call it off not because they have a faint heart, but due to lack of information provided on their end. This being said, it pays that prior to putting your hard earned money to such an investment, the following distinctions and particulars must be well-grasped and understood:The difference between Royalty Investments interest and Mineral Interests
There are very few distinctions and similarities between the two. Mineral interests can accumulate upfront bonus payments while royalty interests cannot. Common denominators between the two include there: both MI and RI can get revenue from well production, can obtain underground minerals possession, and tenure in both cases does not end even if production is at a standstill.
The investment procedure
If you've decided to invest in oil and gas and sell royalties as well, better be certain that you know who you're dealing with. Brokers may serve as middlemen but they don't have the right to bargain nor close dealings with you. Keep in mind, the last say must come from the party willing to buy your royalties. Secondly, never bite on a baiting bid; these are usually primary low offers. If possible, turn the asking price to your favor and not the other way around. Finally, lay the cards to your prospective buyer and make known to them the details that will make them offer you a much steeper bid. Such details include the site of production, reserves in possession, and your edge over other competitors.
It is important to realize the risks involved in any investment opportunity. Do your research, speak to well respected experts in any niche you are considering. Ask questions, and finally go with your intuition, more often than not, it is right.
by: Elle Wood