New Owner/Inheriting

[c_king]

I’m in the process of inheriting royalties that have gine from several family member to me. I have virtually no idea how any of this works and am just relieved that I was able to provide all of the necessary documentation to prove they’re supposed to be in my name now.

I was recently able to take a look at a few 1099s from the last few years. These mineral rights have been in my family for at least a few decades from what I gather and I know they’ve fluctuated. 2022 was a great year with over 100k in royalties, 2023 came in at a little over 40K, some years have been way up and way down. I’m just curious as to how this stuff works and if there indicators if upcoming years or months will be better than previous ones. I’m happy to have these as it will provide a little cushion and I’ve heard the “never ever ever ever sell these mineral rights” speech many times in life. I’m really just trying to understand what ok inheriting and how it can benefit my family and I as the years go on

[M_Barnes]

Welcome to the world of oil and gas and to the forum.

If you are new, the Mineral Help tab at the top is a good place to start.

Get familiar with the oil and gas commission sites in the states where you have royalties. Some of them have royalty owner booklets. OK does.

Read the county group info in the forum to get up to speed on activity in your areas. If you have questions, go to the state and county and ask about particular areas. It is useful to give a location (such as section, township and range or abstract) in the body of your question. Do not give out personal information such as your address, email or phone. This is a public forum, so be judicious in protecting your information.

Royalties will depend upon your net minerals, your royalty option, the volume of production and the prices of the products (which will vary from day to day).

Talk to your accountant about tax and estate planning.

Make sure that you file all probate or title documents with your name and address in every county where you have inherited minerals.

Contact each of the operators of producing wells and get into pay status. It is the mineral owner’s responsibiity to do so.

A very good book is called Money in the Ground. I found it quite useful when I inherited and needed to catch up quickly.

I would also recommend the National Association of Royalty Owners. www.naro-us.org. They are dedicated to serving the needs of mineral owners across the country. They have chapters in areas that have mineral production. Their conventions, webinars, town halls, newsletters, etc. are quite informative.

You may get offers to buy your minerals. Be very cautious and get completely informed before making any decision.

Set up a filing system that works for you. There are several forum topics regarding that. Paper and digital are a good way to have a backup.

[TODD_M_Baker]

Producing minerals are a depleting asset. Couple that with natural gas prices going from $9 to $2.5 will reduce revenue significantly. Toss in oil going from near $100/barrel to $70 and you can see why there was a large drop in income. Welcome to the roller coaster.

[Mineral_Owner5]

Mineral rights are not always a depleting asset. There is always chances that technology advances and possible future oil and gas production from other formations will be additional income. You are fortunate, don’t throw it away or let others discourage you. Best of luck!

[EEvans]

Great advice. As someone who was in an analogous situation a year ago, I’ll add that I’ve found the Mineral Rights Podcast to be very helpful. Here are the episodes on inheritance. You searched for inherit – The Mineral Rights Podcast