Why Invest In Oil & Gas Royalties
Royalty interests are as old as oil & gas exploration. Royalty interests are essentially rental payments, paid as a percentage of production, by oil & gas producers such as Exxon, Shell and Chesapeake Energy to royalty owners.
Royalty owners are not responsible for costs or risks associated with monthly upkeep, exploration or development on their property. Instead, royalty owners simply receive their monthly percentage share from currently producing oil or natural gas wells.
Institutions historically have invested in royalties for long lived cash flow and to profit from long term rising commodity prices. Stanford University, Yale, Alaska Endowment Fund, the Baptist Foundation and General Motors are well known oil and gas royalty buyers.
Reasons to Invest In Oil & Gas Royalties
- Portfolio Focus: Wells in Primary Production
- No Cash Calls on Future Development
- Montlhly distributed cash flow – all wells are producing and cash flow projections are based on check stub verification – no drilling risk or guess work
- Additional Cash-Flow Growth Potential – No Cost to Royalty Owner
- Reinvest Capital From Real Estate Portfolios – Compatible with 1031 Exchange. Take “extra dollars” from a real estate transaction and defer ALL Capital Gains Taxes
- Cash Flow Paid Monthly For Reserve Life of Wells
- Long Reserve Life (40+ years)
- No Environmental Liability
- 15% Tax Depletion Allowance On Cash Flow
Contact us for more information about investing in oil and gas royalties
Mineral Ownership, Royalties, Overriding Royalties
Royalty owners enjoy their share of monthly cash flow from wells producing on their properties. They are not financially responsible for costs associated with monthly upkeep, exploration or development.
Potential Tax Benefits:
- Capital Gains Tax Deferral via 1031 Exchange. This type of program is usually eligible as replacement property for individuals seeking to complete a 1031 Exchange.
- Annual percentage depletion allowance of 15 – 24% of the Gross Income
Download the Breitling Royalties PowerPoint Presentation on Oil and Gas Royalty Ownership.
