Welcome to Episode 4 of the Mineral Rights Podcast!
Using the embedded player above, you can download the episode to your computer or listen to it here!
Key Points:
In this Episode, we feature a special guest, fellow mineral owner Justin Williams.
Many mineral rights owners are looking for the Mineral Rights MLS or Zillow/Trulia for minerals but unfortunately they don’t exist. The reason for this is it is very difficult for a computer algorithm to accurately value minerals and also there is a lack of readily available data on actual prices paid in arms-length mineral transactions.
Don’t worry, because there is still hope! Mineral rights can be valued several different ways. If there is a lot of activity in the area, you can use a combination of looking at comparable sales (the “Market Approach”) and having a qualified person perform a cash flow analysis (the “Income Approach”). Listen to this episode where we also discuss an easy rule-of-thumb approach that you can use in some cases.
Be sure to also download our FREE Mineral Rights Valuation Resource Guide for 5 resources that will help you understand the value of your Mineral Rights Royalty Interests.
Click here for our FREE Mineral Rights Valuation Resource Guide.
You Will Learn About:
Different approaches used in Valuing Mineral Rights:
- Different Property Types (here’s the link to the blog posts that we mention in the show: Mineral Ownership Types Blog Post on Matt’s company’s website
- The Market Approach (comparable sales)
- The Income Approach (aka Discounted Cash Flow Analysis)
- A rule of thumb you can use to provide a rough estimate of value of some producing minerals.
- We also talk about different factors that go into a mineral rights valuation
If you are considering selling, we discuss some of your options:
- What is a Non-Participating Royalty Interest (NPRI) and when it can be used.
- Selling only a portion vs. selling 100% of your interest
- Long vs. short-term personal & financial goals
- Red flags to look out for (in the fine print of any legal documents)
- and who typically pays for what in a mineral rights transaction.
Finally, we cover some local Colorado mineral rights news:
- Royalty owners claim wider well setbacks would cost them $26 billion Colorado ballot initiative 97 which “would require new wells to be located 2,500 feet or more from homes, schools and water sources, an expansion of the current buffer of 500 feet or 1,000 feet.”
Resources Mentioned in this Episode
- Mineral Rights Valuation Resource Guide
- Article on Determining the Value of Mineral Rights on Matt’s Company Blog
Thanks for Listening!
To share your thoughts:
- Leave a comment below
- Ask a question or leave us feedback via email or voicemail: (720) 580-2088.
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Special thanks to Justin Williams for joining me this week. Until next time!
Matt
