Royalty Income in its Simplest Terms

Royalty income with oil and gas mineral property is similar to royalties with music.

A long time ago Michael Jackson purchased the rights to some of the Beatle's music. When the music Michael bought was played over the radio, Mr. Jackson did not have to pay the DJ, did not have to pay for the expenses to play the music and Michael did not have any liabilities of the music station that played his music. However, every time his music was played, he got paid.

Similarly in the oil and gas mineral property business, when you buy the mineral property, you own the mineral rights to the property. You do not have to pay to drill the wells, you don't pay for the expenses to extract the oil or gas and you have no liabilities in the field. Every time the oil company sells the product they extract, the mineral owner gets paid. In this case it is a percentage of every barrel of oil and cubic foot of natural gas.

If you would like to know more how you can take advantage of a Royalty income from a producing Mineral property, be sure to contact us at your convenience. Just visit our website link below for the contact information.

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This video is meant for educational or entertainment purposes only. This video is not a solicitation. I am not a lawyer, CPA or financial advisor and I am not giving legal, financial or tax advice.