MINERAL ROYALTY BUYOUT · RUNS IN YOUR BROWSER · NOTHING UPLOADED

Is the lump sum for my mineral royalties worth taking?

Mineral and royalty owners get unsolicited letters offering cash for their future checks, usually quoted as a multiple of recent monthly income. Type your current check, how fast it is declining and the offer. It shows what the remaining checks are worth to you at your own discount rate, the annual return the buyer earns at the price, how much rests on wells not yet drilled, and the same comparison after tax.

Planning arithmetic on numbers you type in. Not legal, tax or financial advice. The example figures are placeholders, not a real royalty.

1. Your existing wells

2. Planned wells

3. The offer and your tax

Questions people ask

Should I accept a lump-sum offer for my mineral royalties?

This tool does not tell you to. It shows what the offer is worth against the royalty checks you would otherwise keep receiving: the present value of those checks at your own discount rate, the annual return the buyer earns at the offered price, and the same comparison after tax. An offer that implies a buyer return far above what you could earn elsewhere is paying you less than the income is worth to you.

What multiple of my monthly check is a fair offer?

There is no single fair multiple, which is why this page exists. Buyers quote offers as a number of months of recent income, but the same multiple is generous on a steeply declining new well and stingy on an old, flat one. The tool shows your offer as a multiple and next to the present value of the decline you typed, so you can see which it is.

What is the decline rate, and what is the b-factor?

Wells produce most in their first years and then fall. The initial decline is the percentage the check drops in the first year; the b-factor (0 to about 2) controls how quickly that decline slows. 0 is a constant percentage drop, 1 is typical of many shale wells. The terminal decline is the floor the curve settles to. Your operator's reserve report or a few years of your own statements will show the pattern.

What is the implied return on a royalty buyout?

It is the annual rate at which the royalty income you would give up is worth exactly the offer, an internal rate of return. The higher it is, the cheaper the buyer is getting your income. Compare it with what the money could earn if you kept it.

Why does the tool ask about wells not yet drilled?

Many offers are priced partly on permitted or planned wells. The tool values your existing wells alone and then adds the planned wells at the chance you type, so you can see how much of the price rests on wells that may never be drilled.

How is tax handled?

You type a rate for the lump sum, applied to the offer minus your basis, and a rate for ordinary royalty income. It is a rough comparison only: depletion allowance, inherited basis step-up and how the sale is structured can change the answer a lot, so confirm with a tax professional before signing anything.

Is this legal, tax or financial advice?

No. It is arithmetic on numbers you type in, with simplified assumptions: monthly payments, a smooth decline curve, one price change applied to every month. Read any purchase agreement with an attorney who handles mineral rights, and check what exactly is being conveyed (all depths, which acres, executive rights).

Not decided

What is actually being conveyed (acres, depths, executive rights, overriding royalty versus mineral interest), how the sale is taxed and whether depletion applies, the right discount rate for you, what your operator expects the wells to do, title and curative issues, and whether to sell at all. Payments are modelled monthly on a smooth decline curve with one price change applied to every month; real checks swing with gas and oil prices, deductions and well downtime.

Related tools: the cell tower lease buyout calculator for the same question on rent income, and the farmland lease calculator for other land-income decisions.