Accepting an Offer to Sell Your Mineral Rights

Accepting an Offer to Sell Your Mineral Rights

There is no blanket metric to help mineral owners know what offer is the best when looking to sell. But there are a few metrics to consider when evaluating a buyer. Mineral owners often forget they are in control of the process. Never let a buyer make you feel like you need them; in reality, they need you. The best buyers are those that provide insights for owners and have the heart of a teacher while walking them through the process. Let’s take a look at the top items to consider when evaluating who to sell your minerals to:

  • Offer Letter: Were you provided a blanket letter with no direct valuation or did the buyer determine the value of your minerals prior to sending an offer letter? Some buyers provide very targeted offers to sellers, investing time and effort to ensure they are providing owners with a reasonable offer to shorten their buying cycle and reduce the stress from the process. There is nothing wrong with selling to a buyer that sends out blanket post cards or mailers, but the more targeted the offer the more likely you are dealing with a company that has domain expertise in the location of your minerals.
  • Heart of a Teacher: Some buyers have a maximum dollar value they will spend on minerals and will negotiate until that point. Others will put together small presentations or one-page briefs explaining their offering. Again, selling to either is fine, but buyers that come to sellers with a reasoning behind their offer can be easier to work with. There are hundreds of buyers out there and you, as the mineral owner, get to choose yours.
  • Reviews: Similar to hiring a contractor for home repairs, get reputable quotes from others who have sold to this buyer in the past. Ask for references and call them. Ask the right questions: Do you feel they paid a fair value? How quickly did you receive payment after selling? What made this buyer stand out to you? Take time and review each buyer and their references to better understand who the company is.
  • Valuations: Many owners will get mailers from buyers stating they pay 4-10x annual revenue…and then a buyer claiming they will pay 60x revenue. What gives? Many buyers try to buy low and sell high, flipping your minerals for more money. MineralIQ’s valuation tool shows revenue-based valuations, which do not include upside. An owner should expect to receive 4-10x annual revenue offers for producing wells only. If there are permits, DUCs (drilled-uncompleted), or rigs in the area around your minerals, the multiple increases. Jumping on the 60x revenue offer is not always the best solution. Take your time and research why they are offering so much; get additional quotes from reputable companies to see the variance of the offers. If you are still unsure on what your minerals are worth, talk to a professional at MineralIQ to get personalized help.

Even after evaluating multiple offers, it can still be difficult to decide. MineralIQ has a trusted network of buyers who can provide additional quotes if you want to ensure that you are getting top dollar for your minerals and also provides professional services to ensure you have the right information when making a large life decision. At the end of the day, you do not have to sell your minerals. You are in control.

← Back to Learning Center