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Who Would Sell And Why?

Tower Rock Oil & Gas offers mineral right, royalty, and working interest owners the opportunity to sell their oil and gas property quickly and discreetly and with the most transparent process possible.  We will work hard to provide you with as many answers possible so that you can make the most informed decision possible. Who contacts Tower Rock Oil & Gas to sell, and why?

  • Oil and gas professionals including geologists, petroleum engineers, and attorneys that need capital for other investments.

  • Retirees and empty-nesters working on estate planning and simplification.

  • Heirs who recently inherited their property and are unfamiliar with what it is they now own.

  • Private individuals who are bearish on oil and/or natural gas pricing or those that want to invest in appreciating assets.

  • Non-producing mineral owners who would rather have the “bird in the hand” than risk their property not being developed fully or at all.

  • Clients who need capital for college tuition, medical expenses, home improvements, or countless other opportunities.

While there can be a significant financial gain via mineral ownership if all goes well, there are also many unfavorable events that can affect the market value of the minerals.  When performing a valuation, these risks are considered and the valuation is adjusted accordingly.

 

1. The minerals aren’t developed because…

  • Oil and gas prices drop and consequently freezes or slows the leasing and developing of all unproven properties.  (Refer to Figures 1 and 2 below).

  • Dry holes or underwhelming production from near-by wells reduces likelihood that the minerals are developed.

  • The operator isn’t able to raise the required investment of $250k – $12MM per well to proceed to develop the minerals.

 

2. If the minerals are drilled, they might not be lucrative because…

  • Mechanical or other issues prevents completion.

  • Dry hole or underwhelming production affects not only the proceeds from that well, but the likelihood that subsequent wells are drilled as well.

  • Well starts strong, but then sharply declines limiting total amount of recovered (and sold) oil and gas.

  • Quality of oil found to be non-optimal (ie. too dense; too much sulfur, water, and sediments)

Figure 1: Correlation between natural gas drilling activity and the price of natural gas
Figure 2: Correlation between oil drilling activity and the price of oil