If you have noticed your royalty checks drop due to oil prices you are not alone. The current price of oil is having an impact on royalty owners all over Texas. As the price of oil continues to be weighed down we will see royalty checks continue to stay lower. There are a number of issues facing the oil and gas industry right now and each is causing pain in oil prices. As royalty checks drop due to oil prices mineral owner are left wondering what to do next.
Why royalty checks drop due to oil prices
The reason royalty checks drop due to oil prices is because the price of oil directly impacts your royalty checks. There are two primary things that affect royalty checks value in Texas. The price of oil and the amount of oil produced are the two biggest factors in how much you receive each month from royalty checks. If either of these moves dramatically you will see royalty checks decline in value. When royalty checks drop due to oil prices it’s because the amount of production is multiplied by a much smaller amount. This leads to lower royalty checks in Texas.
Generally speaking you can expect to see the decline in oil price impact your royalty checks in 2 to 3 months. There is a lag in how long it takes the price of oil to affect royalty checks. The reason is that oil and gas companies receive a higher amount for a while and the accounting for revenue takes some time to flow through. This will impact when you start to notice lower royalty checks in Texas. You may have also noticed that the price you receive has gone up recently. In 2 to 3 months you will see those royalty checks go back down in value as the current oil price impacts the amount paid for production.
Should you sell oil and gas royalties in Texas?
If you are considering whether to sell oil and gas royalties in Texas now is still a good time to sell. There are still a large number of royalty buyers in Texas who are interesting purchasing properties. These buyers realize that the price of oil is cyclical and they are willing to pay based on the expected future production value. Deciding whether to sell oil and gas royalties in Texas is a personal decision. If you are on a fixed income or if getting a lump sum today would help you meet a financial need there is nothing wrong with selling oil and gas royalties in Texas.
If you do want to sell oil and gas royalties in Texas, we recommend you list them online at US Mineral Exchange. The reason is that you will get the maximum value when you sell oil and gas royalties in Texas by getting your property in front of a large number of buyers. These buyers will compete against one another which drives up pricing and allows you maximize value. We’ve spoken to a large number of mineral owners who have been able to sell oil and gas royalties at US Mineral Exchange and they were very happy with the price they received.
