Frequently Asked Questions
There’s a lot to consider when it comes to your mineral rights. We’ve included some common questions below. If you have a question that’s not addressed here, please contact us. We’d love to talk to you.
Why should I sell my interest?
Simply put, more control over your assets. Rather than waiting for small monthly royalty checks that can fluctuate and decline, with a large, lump sum payment, you can use your large lump-sum for an immediate need or reinvest. There are also tax advantages—a monthly check is subject to federal income tax, but with lump-sum payment, you can take advantage of capital gains tax rates. In addition, your paperwork and records, as well as estate planning, will be greatly simplified.
Why should I sell to Springbok?
How much will you offer for my interest?
It varies case by case. Our engineers will look at the operator and the property and verify the royalty on your lease to assure that we get you a fair and competitive offer.
What are the tax implications of owning or selling mineral rights?
With monthly royalties, you’re subject to ordinary income tax rates. By selling, you can take advantage of current long-term capital gains tax rates.
Why does the amount of my royalty check change from month to month?
Your royalty amount is based on two variables: the market price for oil and gas, and production. As you’re probably aware from the news, the price for oil and gas fluctuates wildly, and your check will reflect any increases or decreases. From a production standpoint, your royalty is based on the amount of oil and gas that is produced. In any reservoir, there is a finite amount of oil and gas that can be produced, so over time, wells will begin to produce less and less. In addition, any mechanical or operational problems with the production equipment could also affect the amount of oil and gas produced, so that will affect your check, too.
If the market is so risky, why does Springbok want to buy my mineral interest?
As an individual, your revenues are dependent on production and drilling results in a small area, so if production declines or oil and gas market prices fall, your income can dip drastically. As a small business with strong financial backing, we cast a wide net, so while we do assume risk, we have the volume and scale to manage it. We invest over the long term and buy enough mineral interests to diversify our risks so that we can manage in the event that one of our interest’s value declines.
Does Springbok buy producing and nonproducing interests?
Springbok purchases both.
How do I know what my mineral interest is worth and that this is the best price?
We have geologists and engineers on staff who take a deep dive into the actual well itself so that you have a solid understanding of what your interest is worth. After our comprehensive evaluation of the well, we’ll also look at the current price of oil and natural gas in the U.S. and abroad, oil and gas futures, global usage patterns, and projections for future demands. We use all of this information to develop the most competitive offer.
What if I’m not ready to sell? Can I wait and request another offer?
Yes, you can. Our offer does not obligate you to sell your interest. However, the prices could decline and we can’t guarantee you’ll receive the same offer or that we’ll still be purchasing in your area.
How quickly will I receive my lump-sum payment?
We are well funded, so we can close and get your payment to you as soon as possible.