Common Questions

Don't worry! You aren't the first to ask!

 

Don't See Your Question Here? We're happy to help!

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How do I know if I own minerals? 

If you don't already know, typically you will find out if an oil and gas company identifies you owning minerals and contacts you to lease these mineral rights.

 

In some circumstances, complicated legal issues can make it appear as though you own minerals, when in fact you do not. If you agree to sell to Live Oak, we will conduct thorough research and attempt to verify your ownership. 

 

What is a royalty interest? How is it different from mineral rights? 

A mineral interest (mineral rights) is your ownership of the actual oil and gas in the ground. 

 

When you sign an oil and gas lease with a company, you are granting them permission to explore for and to produce oil and gas from your minerals. In exchange for signing this lease, you receive a royalty for a percentage of the production if a successful well is drilled.

 

A typical lease royalty ranges from 1/8 to ¼ (12.5% - 25%). The royalty you receive is determined by dividing the number of acres you own by the total number of acres in a given oil and gas well or unit. 

 

If you sell us your royalty interest and the oil and gas lease you previously signed expires due to lack of production, in most instances, the royalty you sold to us will also expire and will then revert back to you. 


Why sell Royalties vs. Minerals?

 

Selling only the royalty interest allows you to get an upfront cash payment today, while also allowing you to keep 100% of your mineral rights.

 

In most instances, once your current lease expires due to lack of production, all rights will revert back to you- the mineral owner, and any claim Live Oak had to the royalty interest will also expire.

 

Selling only the royalty interest allows you to pass down your mineral rights to future generations and provides your family the potential for all future benefits.

 

Do royalty interests lose value over time? 

 

ALL WELLS RUN DRY! 

 

There is only so much oil and gas in each reservoir in the earth. When oil and gas wells are drilled, the production from these wells will generally decrease over time.  As the production starts to decline, so do your royalty payments. Once the well completely stops producing, the well will be abandoned and the royalty payments will also come to an end.

 

How long does the selling process take? 

The selling process typically takes less than 10 business days from the time you contact Live Oak. In rare circumstances, it may take up to 30 days. 

 

How does Live Oak value royalty interests? 

Buying a royalty interest is no different than any other investment. The value we attribute to a royalty interest is based on our expectation of future revenue plus an acceptable rate of return.

 

There are many factors to consider when estimating future revenue. We must consider oil and gas prices, production volumes, reservoir size, geologic risk, interest rates and even political influences.

 

Live Oak buys royalty interests across the United States which allows us to diversify risk more effectively than the average royalty owner that may own an interest in just a few wells.

Who do we buy royalties and minerals from? 

Live Oak buys interests from individuals, estates, trusts and companies. Our purchases vary in size from one acre to thousands of acres.

 

Can I sell my royalty if there is no production? 

Yes! You can sell your royalty whether current or past production has occurred under your lease.

 

Can I sell my royalty if I haven't signed a lease? 

Yes! As long as you own the mineral rights, you can sell your royalty interest regardless of whether or not you have signed a lease. The royalty deed will apply to any leases you may sign during the agreed upon time period with Live Oak (typically 3 – 10 years) and will remain in effect as long as there is production holding the leases.

 

Don't See Your Question Here? We're happy to help!

Call us at (800) 935-3161 or click below to contact us.  

 

 

 

Call Toll Free: (800) 935-3161

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