Buying Oil and Gas Royalty Interests – Your Guide to Doing It the Right Way

Oil and Gas Royalties

If you are interested in buying oil and gas royalty interests, then you will be pleased to know that this certainly is the right time. The prices of mineral commodities such as oil are expected to rise hence, it can be considered the best and the safest option to invest in. You can approach the decision to invest in gas and oil in a spectrum of ways but the difficult part would be to determine whether which one would fit the bill perfectly?

Here are a few guidelines that you might want to consider when buying oil and gas royalties interests:

·         Gas and oil investors should decide initially whether they should invest in a mutual fund, which is meant for investing in energy instead of a direct form of investment or UIT. The latter route is considered less risky but also offers paybacks that are ominously lower. In contrast, the former is actually riskier but with greater paybacks and an entire range of unique tax incentives not available anywhere else, the decision is tough.

·         If while buying oil and gas royalty interests, direct participation is favored, then you will have to decide whether you will follow working interest partnership or a royalty arrangement. Obviously, mineral royalties are payable to landowners and if you wish to walk on this path, do consult a real estate agent for purchasing land, which has oil wells.

·         In case, you decide to make gas and oil investments directly, even without keeping the land, then the single most important thing you will have to decide on will be that if you would plan to own shares in partnership else acquire complete or part interest of the said oil project.

·         Now, if the decision has been made to make an investment on an opportunity that is a partnership-based investment, then you may be asked to prove whether you are an actual accredited investor. This, in real terms, means, that your income should touch the 250,000 dollars-a-year mark or you have a net worth close to one million dollars. At the end of the year, you will be mailed a K-1 form that will clearly outline your share as a partner in the income as well as expenses.

·         If you are planning to invest in a project based on working interest then you should know this that any returns you receive will become your earned emolument. Therefore, you are required to leave out self-employment tax.

·         Working interest investments generally involve the collaboration of a geologist with your decision who will rework or drill on the project to make the investment profitable.

·         When oil and gas royalty interests via a working interest arrangement, one thing you must be careful about is that these kinds of investments are not directly regulated by the SEC.

·         You should also be aware that many projects related to gas and oil investments are not publicized. Therefore, consultation with a petroleum engineer for figuring out if something is possible or not, is important.

You need to follow this pattern before oil and gas royalties interests and you will be able to get guaranteed high returns with your investment.

Uni Royalties Ltd. is a petroleum management firm that has a wealth of experience in the oil and gas industry. We carry out effective assessments of your land and are able to match those with a deal, which you will not be able to reject. We deal in all kinds of mineral royalties, lease of royalties and can assist you in scoring an experienced agent for further dealings. Visit https://royaltypurchaser11.wordpress.com