By working with a mineral management company, you can be confident that your assets are protected and your revenue is maximized with limited involvement.
If you own the mineral rights to a property, you may have a unique opportunity to generate new revenue. However, knowing how to capitalize on these opportunities isn’t always common knowledge for people not well-versed in the oil and gas industry.
Whether you’ve inherited mineral rights or an oil lease from a family member or are looking to take advantage of the resources on land you already own, it’s important that you go about it in the right way. Otherwise, you may end up finding more trouble than revenue.
Can you answer these questions?
When speaking with prospective clients who are unsure if they need a mineral management partner, we ask them if they know the answers to these questions:
- 1. Do you know what is getting paid on?
- 2. Do you know which wells have stopped producing to open acreage?
- 3. Is everything in pay status?
- 4. Can you easily match revenue to 1099s?
- 5. Do you have any funds in suspense?
- 6. How are you tracking dormant mineral clauses?
- 7. Do you know how much revenue a specific property has produced and would you be able to provide documentation in a timely manner?
If these questions yield uncertainty and more questions, then outsourcing your mineral management could be a great solution for you. Managing minerals can be very difficult, and knowing how to manage these rights is imperative for long-term success.
Knowing How to Manage Your Rights Is Crucial
Because mineral rights ownership isn’t something the average person has experience in, it’s easy for those in the know to take advantage of those less knowledgeable. If you try to sell mineral rights on your own, for example, you could end up with offers well below the market share. You likely don’t know what your rights are worth, and you probably don’t realize just how many potential buyers are out there. So, you could end up with only a handful of offers and assume the highest bid among them is the best you’ll get.
Things don’t necessarily look any easier if you’re keeping your rights. Mineral management comes with a different set of complications you might experience if you don’t know what to do. You could end up getting taken advantage of during lease contract negotiations, for instance, or you could end up paying fees that rightfully should be covered by your exploration and production (E&P) company.
Day-to-day management comes with its own set of considerations (which can be overwhelming even for those who do have mineral management experience). You have to make sure all your information is accurate, up-to-date, and organized so you can monitor payments, calculate your own division order interest, and cross reference volumes and pricing. This is the only way you can truly be certain you aren’t missing payments or that your mineral and oil royalties aren’t being undervalued.
How to Get Started With Mineral Resource Management
If all of this sounds like more than you can handle, don’t worry. You don’t need to be an expert in mineral and oil leases to properly manage them. However, you do need to know where to begin. Here are two initial steps to get you started:
Make sure you have all your documents in place.
Improper documentation is one of the biggest mistakes you can make when trying to manage deeds, title, and oil leases. When it comes to mineral rights management, there’s a whole host of documents you need to keep track of. Without proper care, it can be easy to fill one out incorrectly or let one slip through the cracks.
The first thing you need to do is gather up all your documents and make sure they’re in order. This includes source documents, property titles, division orders, existing leases, checks, tax records, and inventory sheets as well as any other documentation with relevant information. Organizing all these documents can be a big job, but doing the work ahead of time will make it much easier to manage your rights going forward.
Enlist the help of experts.
Whether you’re dealing with a single lease or a large portfolio, mineral resource management can be a full-time job. By working with a mineral management company, you can be confident that your assets are protected and your revenue is maximized without having to deal with everything yourself.
Contact Valor Today
Valor provides mineral management services developed and run by industry professionals who have decades of experience. If you’ve recently come into possession of mineral rights or oil leases, we can help you make sure you get everything out of your new resources. Contact us today to see what we can do for you.
The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
