Complete Transcript of Flash Video
Purchaser of Oil & Gas Royalty and Working Interests
Royalty Clearinghouse is a professionally run oil and gas property management and acquisition company based in Austin, Texas. Founded in 1999, we use decline curve analysis and engineering software to evaluate your oil and gas royalty, mineral or working interest. We work with interests in Texas, Oklahoma, Lousiana, Arkansas, and the rest of America. If you are interested in the sale of your mineral rights, oil and gas properties, or working interests, please explore our offerings.
Royalty Clearinghouse strives to generate the most aggressive offers for all or a portion of your royalties, mineral or working interests by using state of the art software and the latest technology. We look forward to the opportunity to work with you and to explain options involving your producing oil and gas interests.
Royalty Clearinghouse History
Royalty Clearinghouse was founded in 1999 by Shain McCraig and Al Koehler in Austin, Texas. Mr. McCraig is a geologist with over 25 years of experience in all aspects of oil and gas operations. Mr. Koehler has over 20 years of experience in the technology field.
The company started with the goal of providing an outlet for the royalty or working interest owner to liquidate assets in a discreet environment at true market pricing. The combination of years of experience in the oil patch, with the ability to predict well decline and incorporate NYMEX futures pricing, allows us to pay aggressive prices for oil and gas interests.
Over the years, we have closed thousands of transactions with geologists, landmen, oil and gas companies, private individuals, institutions, trusts and estates. Royal Clearinghouse has established itself as a premier purchaser of oil and gas production.
Property Evaluation
Prior to mailing offers, Royalty Clearinghouse performs a complete evaluation on every well. This allow us to determine the value of each royalty owner's interest. A petroleum engineer performs all evaluations by analyzing historical production data and determining decline rates.
That information is then used to perform a decline curve analysis to predict future well performance and calculate remaining oil and gas reserves. We then use NYMEX futures pricing to help determine the value of those reserves. With today's volatile market conditions, this may be an oppurtune time to convert your royalty interest into one cash payment.
How to Receive an Offer
Royalty Clearinghouse offers the individual mineral and/or royalty owner easy access to converting his or her properties into cash. We generate a high number of daily purchase proposals to owners throughout the United States. Our experience and engineering staff allow us to provide prompt evaluations (usually 1-2 business days) and complete the transaction with no closing costs or filing fees to the seller. The information needed from you to get the process started is minimal; we only need a couple of recent check stubs.
We have outlined our easy six step process for selling your Oil and Gas royalties, mineral rights, or working interests. Please Know that you have complete control over the selling transaction and have the ability to stop the process at any time, even if we have completed phase five!
- Contact a professional at Royalty Clearinghouse by calling 1.800.877.5122 and begin a relationship with one of our account managers today.
- They will answer any questions you have and learn more about your unique situation.
- Send 2-3 recent check stubs from your property for verification of income.
- Our engineers will then verify the initial offer amount, or generate a new offer if you have not yet received one, based on current information.
- Your personal account manager will contact you and ask for a verbal commitment to sell your property for an agreed upon amount.
- Our staff will put togethor the paperwork necessary to complete the transaction and send it to you along with payment.
Reasons To Sell
There are various reasons why an entity or individual would consider selling. The following are some of the more common reasons:
- Bigger payout now
- Rather than waiting for monthly, quarterly, or yearly checks to arrive, selling would provide a lump sum cash out opportunity. This type of payout would allow for the elimination of high interest credit card bills, home or car payments, medical expenses, or any other number of liabilities.
- Elimination of paperwork
- Selling one's oil and gas properties can help eliminate having to calculate and file the forms associated with depletion and property tax records. the paperwork and financial record keeping associated with owning oil and gas properties can be cumbersome and tedious for anyone not dedicated to this type of asset management.
- Depreciating Assets
- All oil and gas properties are depleting natural resources rather than financial assets that could appreciate in value. Rather than wait for the day when the property stops producing, proceeds from a sale will provide the financial ability to invest in another form of asset that will not depreciate.
- Elimination of trusts, estates and partnerships
- Maintaining properties in an Estate, Trust or Partnership yields the responsibility of maintaining careful records, painful tax calculations(as previously mentioned), as well as distribution of funds and K-1's etc. Selling would allow the flexibility of the distributing one lump sum cash settlement to all heirs and/or partners.
- Division of Interest
- Although leaving minerals and royalties to one's heirs may sound like the best solution, many times, because the royalty is distributed to various heirs, the actual cash flow that they receive becomes trivial. Those trivial monthly, quarterly, or sometimes, yearly payments still hold all the aforementioned responsibilities that could become a headache. these interests, after having been divided several ways, have relatively little financial value to the heirs. Also many heirs know little or nothing about the paperwork associated with transferring and maintaining an oil and gas property.
- Elimination of property taxes
- Texas property taxes, also known as ad valorem taxes, are not assessed on the current cash flow, but rather on what the appraiser believes is the future value of the property. This method of taxation is sometimes greatly disproportioned and can be as high as 25% of yearly income.
- Uncertainty
- The oil and gas industry, and therefore all assets in the realm, are subject to political market, and various other uncertainties. Windfall profits taxes, competition with alternative energy, and headlines from the Middle East are just a few major contributors to the volatility of the Energy Industry. Weather variances also dictate pricing. A mild winter, for example, would drive natural gas pricing down, as the demand would be lower at that time.
Working Interest
Royalty Clearinghouse is also a large purchaser of working interests. In order to perform an engineering evaluation of your working interests we will need to review the 12 most recent expense statements and the three most recent revenue statements.
Sale of a working interest eliminates:
- Liability
- Releases the working interest partner of liability on the lease from the sale date forward.
- Uncertainty and risk
- You are at high risk of a drop in production or decline to the point where a well or wells are uneconomic to operate. Working interest partners are responsible for the cost to plug a well.
- Expenses
- Working interest partners are responsible for the expense associated with operating a well. Depending on the operator this expense can actually cause a lease to operate at a net loss.
Frequently asked questions
Why do my checks vary each month?
Production from your well can vary greatly on a month-to-month basis, causing your checks to change in value. If your particular well is producing with a small decline, your checks should be more sensitive to the rise and fall of energy prices. You should have seen your checks rise throughout 2008 with a sharp drop in the final two or three months.
What is the cost to transfer my interest to my children or heirs?
It can vary greatly according to how much estate planning has been done. If you have all the paperwork and your assignment, it can be relatively inexpensive to transfer an interest. If you do not have a lot of the paperwork and need legal assistance it can be quite expensive, especially if you need to split the interest among multiple heirs. Often the cost to divide the interest three ways would exceed the value of the original interest.
What happens if I get Royalty Clearinghouse to evaluate my interest?
That is totally up to you, the customer. We will evaluate your interest and provide you an offer for your interest. The decision to keep or divest your interest is up to you.
How is the value of my interest determined?
Prior to mailing offers, Royalty Clearinghouse performs a complete evaluation on every well. This allows us to determine the value of each royalty owner's interest. A petroleum engineer performs all evaluations by analyzing historical production data and determining decline rates. That information is then used to perform a decline curve analysis to predict future well performance and calculate remaining oil and gas reserves. We then use NYMEX futures pricing to help determine the value of those reserves. With today's volatile market conditions, this may be an opportune time to convert a royalty interest into one cash payment.
What does the future hold for oil and gas pricing?It is impossible for anyone to fully predict what prices will do. There are thousands of experts who offer predictions on inventories and future prices, but very few agree.
Why do I not receive a royalty check anymore?
There are several factors that may have contributed to the discontinuation of payments.
- The amount due may not be enough to be distributed. Many companies wait until the amounts reach $50 or even $100 before generating a check.
- The company responsible for distribution of payment may have changed and the transition may not be complete.
- The well associated with your interest may no longer be producing oil or gas. All oil and gas wells are depleting and will eventually decline to the point where they are no longer economic to produce.
- Your interest may be in “Suspense” due to a change of address or a change of ownership not completed correctly.To determine the exact reason, try contacting the number found on the last check you received.
How do I receive an offer for my royalty or working interest?
- Contact a professional at Royalty Clearinghouse by calling 1-800-877-5122 and begin a relationship with one of our account managers today.
- They will answer any questions you have and learn more about your unique situation.
- Send 2-3 recent check stubs from your property for verification of income. If this property is a working interest, please also submit the 12 most resent JIBs.
- Our engineers will then verify the initial offer amount, or generate a new offer if you have not yet received one, based on current information.
- Your personal account manager will contact you and ask for a verbal commitment to sell your property for an agreed upon amount.
- Our staff will put together the paperwork necessary to complete the transaction and send it to you along with payment.
Am I obligated to sell if I receive an offer?
You are not under any obligation to sell your interest at any time.
I do not see my question covered here; what do I do?
We are sorry that we were not able to answer your question in this forum, but we would be happy to address any question you might have via email or phone. Feel free to contact us any time.
Client Testimonials
“Dealing with Royalty Clearinghouse has been a very positive experience for my family.”
-Pam W.
Houston, Texas
“You are so kind to respond to me so quickly. It is rare today that someone provides such prompt customer service. I am sorry that we cannot do business right now, but I am quite grateful that you supplied me with the information source that I needed.
I hope that I can determine more specifically what I hold and if it has some production possibility. If the oil begins to flow, I will surely contact you again. I tend to reward folks who deal honestly with my business. In the meantime, good luck to you and your firm.”
-Rollin C., Ph.D.
Oklahoma City, Oklahoma
“Mr. Torres, just a quick note to thank you for making the sale of my royalties in Wood County, Texas so easy, and so fast!! It is greatly appreciated!”
-Lisa S.
Dallas, Texas
“Thank you for a professional transaction. I recommended Royalty Clearinghouse to a company that produces software for monitoring estates. The company continually received requests from non-profits for assistance with oil/mineral rights given through estates. I was happy to provide them with your name, which they will forward to anyone needing help.”
-Ilana O.
Director, Charitable Company
Reseda, California
“Thank you for handling this in such a professional manner. Royalty Clearinghouse will be first on my contact list should we have another Estate that has mineral interests.”
-Denise I., CPA
Investment Counsel Company
San Diego, California
“Your company has been most professional. Please let me know what I need to do to get the sale going. I appreciate your promptness and as I stated your complete professionalism. Obviously the other company that made such a high offer did not or could not follow through. I'm looking forward to doing business with you--at your earliest convenience.”
-Debra W.
Midland, Texas
“Thank you for your help -- I have appreciated your professionalism and courtesy.”
-Barb D.
Banking Professional
Seattle, Washington
“Amy, thank you so much for all of your help. You have given me excellent service and I do appreciate it. I can't remember when I have dealt with such a professional organization as yours. My thanks to Mr. Torres also.”
-Jim G.
Dallas, Texas
“I am writing to compliment you on your excellent employees. In a recent transaction, I sold some minor royalty interest. Elaine Buck was straight forward in negotiating a price, and very helpful in seeing to it that I received proper and timely payment. I was treated with respect, as if I were selling some huge interest. I can’t say enough about how well I was treated.”
-Dr. Gerald M.
Austin, Texas
Contact Us
401 Congress Avenue, #1510
Austin, Texas 78701
Phone: (800) 877-5122 or (512) 458-4545
Fax: (512) 458-4262
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