Who Buys Mineral Rights? 6 Types of Mineral Buyers
Mineral rights are bought by six main types of buyers: mineral acquisition companies, private equity-backed funds, oil and gas operators, individual investors, and brokers and online marketplaces that connect sellers to a network of buyers.
Most individual and inherited owners end up selling to a mineral acquisition company, but it pays to understand all your options before you accept any offer. The type of buyer decides how an offer is put together, whether a commission comes out of the price and how long it takes before you get paid.
Knowing the differences lets you compare an offer from one type of buyer with an offer from another on the same terms. The six types of mineral rights buyers are listed below.
- Mineral acquisition companies: firms that buy and hold mineral and royalty interests directly, with no commission and a typical closing in 30 to 45 days.
- Private equity-backed mineral funds: institutionally funded firms that aggregate large royalty portfolios and show the most interest in sizable producing positions.
- Oil and gas operators: the companies that drill and produce the wells, and that buy mineral rights next to leasing them.
- Individual royalty investors: private individuals who buy royalty interests directly through flexible, relationship-driven deals.
- Brokers: intermediaries who take your property to a large network of buyers, so that competition between those buyers can raise the price.
- Online mineral marketplaces and auctions: platforms where an owner lists an interest and several buyers can make an offer on it.
Mineral acquisition companies
Mineral acquisition companies are firms whose business is buying and holding mineral and royalty interests. Selling to one of these firms is the most direct way to sell mineral rights, because the company that makes the offer is also the company that keeps the minerals.
Sometimes a mineral acquisition company will bundle small tracts together to sell to bigger institutions as well.
A mineral acquisition company buys directly, so no commission comes out of the price. The company handles title and paperwork, and a sale typically closes in 30 to 45 days. Most individual owners and inherited interests fit this type of buyer.
Private equity-backed mineral funds
Private equity-backed mineral funds are institutionally funded firms that aggregate large royalty portfolios. These funds have deep pockets and offer strong pricing on sizable producing interests.
Larger producing positions fit a private equity-backed fund best. Owners often reach these funds through a broker rather than directly.
Oil and gas operators
Oil and gas operators are the companies that drill, complete and produce the wells on a lease. Next to leasing minerals from owners, some operators also buy mineral rights outright.
An offer from an operator works the same way as an offer from any other mineral buyer. A serious offer comes in writing as a Purchase Sale Agreement, and the buyer does the title research before closing.
Individual royalty investors
Individual royalty investors are private individuals looking to buy royalty interests directly. Their deals are flexible and relationship-driven.
Smaller or niche royalty interests that bigger players might not want are the best fit for an individual investor.
Brokers
Brokers are intermediaries who have a large network of buyers. A broker does not buy your minerals but takes your property to that network, and competition between buyers can raise the price.
Owners prioritizing maximum exposure for their property fit this route. A small commission is usually baked into the offer.
Online mineral marketplaces and auctions
Online mineral marketplaces are platforms where an owner lists mineral or royalty interests and several buyers can make an offer on the same property.
Some platforms run the sale as an auction. A marketplace serves the same goal as a broker: exposure to many mineral buyers at once instead of a conversation with a single buyer.
How do you choose a mineral rights buyer?
Choosing the best path depends entirely on your specific timeline and financial goals. Selling directly to a mineral acquisition company is typically the most straightforward option, if you prefer a fast and guaranteed transaction with zero commission fees.
Working with a broker is a great choice, if you own a lucrative producing asset and are willing to pay a percentage fee to maximize your market exposure. Ultimately, securing a transparent valuation from a reputable buyer is the smartest first step before making your final decision.
Which buyer fits a small or inherited interest?
A small or inherited interest usually fits a mineral acquisition company or an individual royalty investor. Both buy smaller positions directly, without a commission coming out of the price.
Selling inherited rights may need probate paperwork or an affidavit of heirship. The buyer often finds the records in the courthouse itself. With an unclear title, having an attorney look at the agreement is worth weighing.
Which buyer fits a large producing position?
A large producing position draws private equity-backed funds and brokers, next to mineral acquisition companies. Producing rights are valued on the royalty income the wells pay out, so the size of the monthly royalty check shapes which buyers compete for the interest.
With a larger transaction, it is sensible to have an attorney look at the Purchase Sale Agreement before you sign.
What should a buyer explain before you sign?
A good buyer explains the buying process, the terms of the offer and the closing timeline before you sign anything. A serious offer comes in writing as a Purchase Sale Agreement, which typically includes the purchase price, the lands being conveyed and a due diligence period.
A mineral rights buyer worth working with:
- Doesn't pressure you to sell your minerals or sign a purchase agreement
- Explains their buying process and any questions you may have
- Gives a clear closing timeline
Two red flags to avoid:
- Offers with a number without doing any underwriting or analysis on your mineral property
- Any buyer asking you to pay fees up front
Should you sell to a mineral rights buyer at all?
The short answer is it depends. Plenty of families hold minerals for generations, but sometimes it makes sense to sell, because the hydrocarbons underneath an active well are a depleting asset and your mineral property may be worth more today than it will ever be in the future.
Depending on a bunch of variables such as active permits, it may make sense to cash out for a big pay day or hold for consistent royalties for years to come. Sometimes, the point of getting a valuation isn't to sell. The point is to have a number, so that you are well informed to decide whether selling or keeping makes sense for you.
Get in touch if you want to know what your interest is worth. We pull the public records, check what the oil and gas wells around you are doing and put an offer together if we are interested. The valuation is free and comes with no obligation, and you talk with the owner of the company, not a call center.
From that first conversation to a funded closing, our mineral rights buying process typically follows the same set of steps. We'd love to assist.
Frequently asked
- What is a mineral rights buyer?
- A mineral rights buyer is a company or person that pays an owner for mineral or royalty interests and takes over the income from those interests. Buyers include mineral acquisition companies, private equity-backed funds, oil and gas operators and individual investors, while brokers and marketplaces connect owners to them.
- Why do companies buy mineral rights?
- Companies buy mineral rights for the royalty income that oil and gas production pays out and for the value of future drilling on the acreage. A mineral acquisition company holds those interests and collects the royalties. Some acquisition companies also bundle small tracts and sell them on to bigger institutions.
- How do mineral buyers decide what to offer?
- Mineral buyers base an offer on public records, well permits, current production from the surrounding wells and commodity prices. Long-term averages of oil and gas prices set the price level, not the price of the day. Producing and non-producing rights are valued in different ways, so the same acreage can draw different offers.
- Are royalty buyers different from mineral rights buyers?
- Royalty buyers and mineral rights buyers are usually the same companies. A mineral acquisition company buys both mineral interests and royalty interests, and the royalty interest is the share of production revenue an owner receives once the minerals are leased. Owners who hold only the royalty side can sell oil royalties to the same buyers.
- Who buys non-producing mineral rights?
- Non-producing mineral rights are bought by mineral buyers that value them with a discounted cash flow model, based on what the surrounding wells are doing. The status of the acreage shapes what non-producing mineral rights are worth to a buyer: leased, permitted or neither.
- Can you sell part of your mineral rights to a buyer?
- Yes, an owner can sell a percentage of their mineral rights instead of the whole interest. A sale is permanent for the share that is sold. The owner keeps the remaining share, along with its royalties if the minerals are leased, and can decide about that share later.
- How long does a sale to a mineral buyer take?
- A sale to a mineral buyer typically takes 30 to 45 days from an accepted offer to a funded closing. Payment follows proof of the signed deed and the shipping confirmation of the signed, notarized deed back to the buyer. Complications such as missing probate paperwork can add multiple weeks.
- Who pays for title work when a buyer purchases mineral rights?
- The buyer does and pays for the title research and any curative work in a mineral rights sale. Title research also checks for judgments and liens that could make a deal uneconomic. The seller may be asked to help with documents such as deeds, leases and revenue statements.