How to Mitigate Some Risks in Buying Oil and Gas Mineral Property

1 year ago
11

There are several strategies that can be used to mitigate the risks in buying oil and gas mineral properties. Below is a brief list of what we believe are some of the risks of buying Oil & Gas mineral property and how to mitigate them.

1. Paying too much for Minerals.
• Total amount of oil and gas in the ground should be more than the price paid for the property.

2. A decline in oil and gas prices.
• The property needs to have at least 1 producing well with more wells anticipated. In other words, has a lot of room for growth. I believe you can make more money with more wells than Oil and gas prices going up 20 or 30 percent.

3. Oil and Gas do not get extracted from your property.
• Only buy a property that has Oil & Gas being extracted and sold. Then the property should be generating income for you on day one!

4. Oil and Gas do not get extracted in a timely and efficient manner.
• Only buy property that has a large oil and gas company that has been vetted and is doing all the work and sending the royalties directly to the property owners. This can cut out the middleman allowing you to make more money.

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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.

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