Helpful Details

Common Questions from Mineral Owners

Why sell?

Ultimately, our clients make the decision whether or not to sell based on their own unique situation and goals. Here are a few reasons others have chosen to sell their mineral and royalty interests:

Accelerated, lumpsum payment of cash to do with what you please (spend, pay down debt, re-invest, etc.). Sometimes people don't want to wait several months or years to accumulate the funds they need to carry out their plans. A partial or complete sale of your interest can give you cash now.
Selling your interest removes the uncertainty and transfers the inherent risks associated with owning mineral and royalty interests to another party. None of us knows the future. Prices move up and down, operators drill good and bad wells, production basins fall in and out of favor, and the oil and gas industry is under constant attack from regulators and environmentalist groups looking to prevent development and even shut in currently producing wells. These risks affect your long-term value and make it incredibly difficult to plan for your future. Selling your interest to a company that is better suited to wear and manage these risks may make sense for you.
Free yourself from the burden of paperwork, filings, and record keeping. Unless your interest is small, shedding this burden isn't usually a primary consideration, but it's certainly an added benefit.

In what areas of the country are you focused?

Our team has drilled and operated wells all over the United States from the U.S. Gulf Coast to Alaska. While we buy minerals and royalty interests all over, our primary focus and area of expertise are in the Rockies and Bakken regions.

If a company is going to follow through on its commitment to provide clients with timely, aggressive offers that can be closed quickly, we've found that we just can't be all things to all people. Other mineral buying companies might try to sell you on the idea of how their "portfolio approach" allows them to pay top dollar for minerals and royalties anywhere and everywhere because their risks are diversified. We're just not buying it. The truth is that just about every mineral buying company takes a portfolio approach and diversifies its risks – albeit some more than others. But at the end of the day, it isn't cheap to staff up and be an expert in all areas of the country. It's been our experience that so-called countrywide experts have high costs (which translates to lower offers) or service suffers, and the process takes too long because they're spread too thin. We won't compromise the quality of our work and our commitment to you.

What's the difference between a mineral interest and a royalty interest?

It's pretty common for folks to use these terms interchangeably, but there are major differences between the two (Industry Jargon). When one owns a mineral interest, they are entitled to negotiate and execute a lease, receive lease bonuses, shut-in payments, royalties and other payments, and the right to transfer some or all of their rights to others. On the other hand, a royalty interest is simply a right to receive a share of the production. It is an interest in the proceeds from the sale of oil and gas minerals, but not the minerals themselves.

Would EME Minerals consider buying non-producing mineral interests or other types of interests?

Absolutely. Of course, each type of interest has value, but different considerations and approaches in determining that value. We'll still focus on getting you the best number in a timely, professional manner.

Is it ok if my interests are in a trust or an estate?

Yes. This is common. We will walk you through all the steps and do the work.

How much will this cost me?

Whether you choose to sell to us or not, you pay nothing.

How long does it really take for me to get paid?

Please check out "What to Expect". From the time we receive the details of your interest, we can evaluate your interest, make an offer, perform due diligence, and get you paid typically in under 30 days. To be clear, we won't rush you. If you need additional time to review our offer or have questions for us, we'll get you the information you need and move at your pace.

Industry Jargon

Gross Acre – This is the total amount of acreage in a given tract of land. In many cases, a given tract of land will have multiple owners that own portions of the total acreage in that tract.
Net Mineral Acre – This number is what matters most to owners of mineral and royalty interests. Net Mineral Acres (NMA) represent the actual acreage owned in a tract or drilling unit. This can come in the form of a 100% ownership of a specific amount of acreage in a tract, or as a fractional undivided interest across the entire tract. Example 1: If you own 100% of 320 gross acres in a 640 gross acre tract, you own 320 NMA. Example 2: If you own a 50% undivided interest in a 640 gross acre tract, you own 320 NMA.
Production Statements – Also referred to as Royalty Statements or Check Stubs, Production Statements are the basic accounting documents distributed to royalty rights owners almost always on a monthly basis. These documents are generated by the oil and gas producer and provide details of the producing property, the products produced and sold, the period in which they were sold, the price at which they were sold, the gross value of the sale proceeds, any allowable deductions from those proceeds, and the owner's type of interest and share of those proceeds based on their Division of Interest.
Division of Interest – Also called a Division Order, the Division of Interest (DOI) specifies the proportional ownership in produced minerals, such as oil, gas, and natural gas liquids. There's a very good chance that a lease or well will have several owners, so the DOI is important because it specifies how much the operator must pay to each owner from the sale of the produced minerals.
Mineral Interest – It is the real property interest created in oil and gas after severance of those minerals from the surface estate. A mineral interest owner has full rights, including reasonable surface use, the right to enter into a lease, and the right to drill or develop the oil and gas beneath the surface. A mineral interest owner also possesses the right to receive lease bonuses, delay rental payments, shut-in payments, and royalties.

Royalty Interest – It is the property interest that grants the owner the right to receive a share of the production. There are several ways a royalty interest can be created, including by virtue of conveyance or reservation in a deed or a lease. Unlike a mineral interest owner, a royalty interest owner does not have full rights, such as the ability to negotiate lease details. In addition, a royalty interest owner does not possess the right to receive lease bonuses, delay rental payments, or shut-in payments.
Lease – Also called an oil and gas mineral lease. In this agreement, a mineral interest owner is delegating the rights to develop the oil and gas beneath the surface to another party. The lease outlines the basic terms of extracting the minerals for sale, the length of time allowed to carry out the action, the royalty to be paid, and other details.
Title Chain – Also called the Chain of Title. This is simply a chronological history of the ownership and other significant events affecting a particular property. Every link in the chain represents the various owners from the present owner back to the original owner.
Conveyance – Also used interchangeably with Assignment, conveyances and assignments are both transfers of ownership interests (e.g., leases mineral interests, royalty interests) in real property.
Deed – The physical document that conveys title from one owner to another. It includes details such as the names of each party taking part in the transfer of ownership and a legal description of the property.

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