Valor Mineral Management Blog
Benefits of Oil and Gas Mineral Management
Many entities own mineral rights, from individuals and trusts to partnerships and oil companies. Many of them benefit from professional management of their assets.
Whether you are a veteran or a novice in the world of mineral rights, professional expertise can maximize ROI and save you from a variety of potential pitfalls. Perhaps you’re an experienced owner that's grown weary of the complexity and paperwork. Or, maybe you just inherited a fractional interest in mineral rights. Fractional holdings often require time-consuming oversight, particularly for the uninitiated. Either way, it’s often appropriate to work with a professional mineral rights management firm.
Challenges of DIY Mineral Rights Management
The substantial value of oil and gas mineral rights is both a blessing and a curse. With significant profit potential comes the possibility of avoidable loss from legal and administrative miscues. Is it better to do it yourself or to rely on someone who performs such tasks every day?
Self-management of mineral rights and royalties presents a classic DIY dilemma. It’s possible you’ll save short-term only to spend extra time and lose revenue long-term. DIY mineral rights management may not be as tricky as trying to be your own doctor, but it can still induce a variety of fiscal ills.
If you’re like many mineral rights owners, you do want to enjoy the fruits of your holdings, but you don’t want time demands to consume you. For example, monthly royalty transactions are a fact of life regardless of the magnitude of your active holdings. Revenue needs to be tracked, expenses need to be recorded and taxes need to be paid.
Qualities of Capable Mineral Rights Management
In response to these challenges, professional mineral rights management firms bring important pluses to the table, including:
State-of-the-art analytical software
A symbiotic combination of advanced education and years of experience
Real-time access and insight
Active relationships with industry pros, including operators, regulators and bankers
Benefits of Professional Mineral Rights Management
Ultimately, one of the biggest benefits of professional management is peace-of-mind. You'll rest easier knowing there is an experienced third-party advocate standing between you and the industry insiders you have to deal with.
Here are some key services mineral rights management firms typically offer:
Mineral property evaluations
When it comes to mineral rights management, it is always important to look to the future. An asset owner and a management company can collaborate to clearly define current and long-term goals.
Professional analysis of the long-term prospects for your mineral rights is vital. You want to make informed decisions that balance short-term gains and long-term potential. Informed analysis of current and projected market conditions is a prerequisite to informed decision making.
Capable risk/reward analyses identify how to:
Increase oil & gas royalties when applicable
Identify ways to generate income from dormant oil and gas properties
Assess current and future values
Market your holdings for potential lease
In appropriate situations, mineral rights management firms complete the exciting process of turning dormant minerals into income-generating assets. To realize the full potential of your unleased minerals, it is often appropriate to research local production histories and trends. Then, you’re armed with the facts that may very well strengthen your negotiating position.
It is often complex and tricky to negotiate the most favorable lease terms. A professional management company has access to local information that can strengthen your negotiating position. Also, the professionals often possess detailed knowledge of the other party that is valuable.
A professional management company becomes a watchdog that protects your rights. Lease reviews and records audits confirm that you are fully compensated for your holdings.
Verify and update ownership
It is important to establish an unbroken chain of succession when it comes to mineral rights ownership and oil/gas royalties. A proper title chain secures your property rights.
Records review and management
Specialized mineral rights management professionals provide initial and ongoing records management. They review leasing histories, and they secure missing documents when necessary.
With the right mineral rights management software, you can enjoy unprecedented real-time access to the information required to make informed decisions. Once a records management system is in place, it becomes possible to quickly pull documents to protect your interests.
Taxes and deductions
Mineral rights owners face a complex array of taxes that vary by jurisdiction. In addition to state and federal income taxes, there are Ad Valorem county taxes to account for. Severance taxes fund drilling site road construction and environmental projects. With professional assistance, you can identify all proper deductions in order to maximize net income.
Proper estate planning includes focused attention on efficient asset management. Whether the size of your holdings, expert succession planning is important to both current and future generations.
For Further Assistance
At Valor Mineral Management, our daily mission is empowerment. We take pride in delivering professional services that truly benefit mineral rights owners. We strive to maximize profit while deftly navigating the minefields of mineral rights ownership.
Valor is a veteran-owned company with a century of collective mineral management experience. We are powered by InGauge, a state-of-the-art digital platform custom-designed to tackle common roadblocks to success in mineral rights ownership.
For expert mineral management powered by experience and technology, please call us at 844-307-6730 or contact us online.