If you have received an offer or if you are trying to determine the value of royalties in Sublette County Wyoming, this article will provide you some general guidance. It is important to know that each property is uniquely different. Some properties will command more due to location, royalty percentage and potential for future activity among other things. We will discuss a few of these here.
Buyers pay premium prices for the following:
Below are some of the factors that a buyer will use to determine the value of royalties in Sublette County Wyoming. Under the right conditions, these factors will provide mineral owners with the best chance at peak offers.
Higher Royalty Percentage: What is your royalty percentage? Are you being paid the least amount possible at 12.5% or were you able to negotiate a 20% royalty income? The royalty percentage plays a very important part in the calculation of future revenue. The higher this percentage, the higher the sales price.
Potential for additional wells: You are currently being paid for one or more wells on your property. How many and how long each has produced is another important factor in the sales price.
It is common for royalty owners to own a part of a “unit” which is a group of wells combined together to form a larger drilling site. Unit sizes can vary but they often range from 5-8 wells each. If you are currently being paid for only one well, the potential for additional wells on your property will assuredly peak the buyers interest. This might encourage the buyer to pay a premium for the possibility of additional income from future wells. However, if you are being paid for 5 wells, the opportunity for additional income is reduced thereby reducing the amount a buyer is willing to pay.
Higher Market Prices: Current oil and gas prices will play a significant role in the value of your royalties. In recent days, oil prices have dropped significantly and are now hovering around $50 dollars a barrel. This sudden decline in oil prices has forced buyers to evaluate each property more closely and consider each offer on where they believe oil prices may settle. Investors use current oil and gas prices to estimate a future income stream and generally speaking, higher oil and gas prices mean higher offers.
Seller beware: The buyer is not going to expose their hand. They will not tell you they will pay a premium for additional well potential. It will be very important to understand what you own and ensure you test the market to ensure you do in fact get paid a premium for your property.
Calculating the Value of Royalties in Sublette County Wyoming
The value of royalties in Sublette County Wyoming can generally be calculated using the form below. Simply stated buyers of royalties in Sublette County pay anywhere from 48 to 72 times your average monthly royalty income.
While this range will provide you an estimate of what you can expect to receive for your Sublette oil and gas royalties, prices outside this range are entirely possible and very often command a premium to these numbers. Many factors will play a role in the valuation of your royalties.
If you are hoping for premium prices, we recommend the services of US Mineral Exchange. They have a database with thousands of buyers from all over the country and have experience getting the highest values for mineral owners.
