If you’re in the market to sell oil and gas royalties, then you will be interested in this article. Here we cover not only who buys royalties, but how to maximize your return on your investment.
How good are your negotiation skills? As in any negotiation, both sides have to feel they are getting something of benefit. There will not be an agreement until this point is reached. Some people get the idea that negotiation is all about forcing the other party into something they don’t want. Perhaps they’re confusing negotiating with conquest.
Negotiating takes preparation, so do your homework. If your potential buyer is a seasoned investor, they will likely do their homework, too. No one can predict the future, but you have to know enough to come close. The more you know about what you’re discussing, the less chance for mistakes and the greater potential for convincing the other party of your asking price.
Remember, they want to buy royalty interests in order to make a profit. Don’t let them think you’re cheating them of that.
It’s important to place yourself in the other party’s shoes. Would you buy what you’re selling? Perhaps you know something they don’t, but then again, they may know more than you realize.
With an auction, you’re pretty much at the mercy of the auctioneer and the ones doing the bidding. You can reduce the risk of shock by setting a minimum bid, but then you run the risk of receiving zero bids. Consult with your auctioneer and take what they say with a good dose of humility. They likely have far more experience with what similar properties have gone for. There are always surprises, but you want to stack things in favor of a positive surprise. And, of course, the auctioneer will likely take a percentage of the earnings as their fee, so set your minimum bid accordingly.
Online auctions have similar concerns. You may well want to set a minimum bid. You may or may not be able to consult with the online auctioneer concerning your particular royalties, so you may be on your own on the subject of your minimum bid. Again, keep the auctioneer’s cut in mind when setting your minimum bid.
Royalties Acquisitions Companies
There are a number of online companies that buy oil and gas royalties. Most, if not all, provide the ability to query them for a no obligation bid. The obvious advantage, here, is that you can gain bids from several and compare. In a sense, you can hold your own auction. And as each of the companies does not charge a fee, and because here you’re doing the auctioneer’s legwork when you sell oil and gas royalties, you could come out ahead with this approach.