Mineral rights are often severed from surface ownership when a family farm or ranch is sold. The rights continue to pass from generation to generation, becoming more and more fractionalized as decades pass. Commensurately, oil and gas exploration results in production on a very small percentage of non-leased or leased property throughout the United States. You may decide that your mineral rights are more valuable to you as available cash than as a piece of paper.

The decision to sell may depend on the owner’s current needs, the number of net acres owned, the owner’s age, and many other considerations. For many owners, it makes sense to sell their mineral rights now and invest the proceeds in a more immediate need. Sellers have used their royalties to pay for vacations, invest in real estate, purchase vehicles, pay college tuitions, or even in some cases to retire mortgages or to retire altogether.

Long-term capital gains tax rates are at historically low levels. For an investor who disposes of an asset held for more than one year, the current law provides for a lower tax rate than is paid on ordinary income, including royalty income. For most of us in 2016, the tax rate on long-term capital gains is 15%, while those in the top bracket pay 20% and those in the 10% or 15% tax brackets pay 0%. According to the Wall Street Journal, these are among the lowest capital gains rates since the 1940s. It is unclear how long these favorable conditions will last.

Magnolia Minerals purchases both producing and non-producing mineral rights. Offers vary with the nature, geologic merit, and location of the property. Low long term capital gains tax rates may mean that now is a uniquely favorable time to monetize an otherwise illiquid asset. We expect to make reasonable, attractive offers and to make our purchases at the high end of the pricing scale.



During sales evaluation, Magnolia verifies and assesses the interest you hold before making an offer for all or part of it. Once a mutually-attractive figure is established, Magnolia prepares a straightforward Deed (transfer document) for your approval. The closing and payment of the full purchase price can be arranged through your bank by wire transfer, check, or otherwise as you may indicate.

Often, owners do not have clear title to their mineral interests and therefore are unable to sell, transfer, or lease their rights. The cost to reopen a probate proceeding and clear a title may exceed the value of the mineral rights themselves. Magnolia has the experience and legal expertise needed to make the process simple and straightforward, and has successfully reopened probates and facilitated ancillary probates for many owners in order to properly deed properties and allow for conveyance (sale with clear title).