WHY OWNERS SELL OIL AND GAS ROYALTIES:
Many times our customers tell us
the reason for selling their interests is for estate planning purposes. Family deaths covering several generations of ownership
have diminished the heirs' ownership to such a small interest that they will never individually realize any substantial income
from their interests. The sale of their interests provides the opportunity to liquidate and clean up the assets of an estate.
Some people elect to sell in
order to eliminate legal expenses of probate, or to simply transfer the interests to the new owners. For the small fractional
interest owner, the costs associated with transferring ownership can greatly exceed the perpetual value of the royalty interest.
Sometimes our customers tell
us that it is cumbersome to try to keep track of royalty interest income and the taxes associated with the interest. This
seems to be especially true for owners of smaller interests. It is very important to understand costs or percentage depletion
of a well when computing taxes. Some interest owners do not want to incur the costs of tax preparation and administration.
By selling an interest, the owner will no longer be required to pay taxes on the mineral interest, and income tax returns
can be simplified.