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Pecos County Texas Mineral Rights
Pecos County, Texas is located in the western part of the state and is known for its oil and gas production. Mineral rights ownership in the county refers to the ownership of the rights to extract oil and gas from the land. In Pecos County, mineral rights are often separated from surface rights, meaning that the person who owns the land may not own the rights to the minerals beneath it.
An interesting fact about Pecos County is that it is home to the world’s first rodeo, which was held in 1883 in Pecos.
In terms of total oil production, Pecos County has very strong oil and gas production. According to data from the Texas Oil and Gas Association, the top oil-producing counties in Texas in 2020 were Midland, Reeves, and Martin. However, Pecos County is still a significant oil-producing county in the state.
What Are Mineral Rights?
If you’re new to the oil and gas world, the concept of mineral rights might sound a little confusing. So let’s break it down in simple terms.
When someone owns land in Texas, that ownership can actually be split into two parts: surface rights and mineral rights.
Surface rights give you ownership of everything above ground like the land, buildings, trees, and anything else you can see. Mineral rights give you ownership of what’s beneath the surface, including oil, natural gas, and other valuable minerals.
In Pecos County, and many parts of Texas, it’s pretty common for these two types of rights to be separated. That means someone could own the land but not the minerals underneath it. Or you might own just the mineral rights even if someone else owns the surface.
If you own mineral rights, you have the legal ability to lease or sell those rights to an oil and gas company. When a company wants to drill, they need permission from the mineral rights owner, not necessarily the landowner. In return, mineral owners usually receive a lease bonus up front and then royalty payments if oil or gas is produced.
There are generally three types of mineral rights ownership:
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Non-Producing Mineral Rights: These haven’t been leased or developed yet.
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Leased Mineral Rights: These have been leased to an oil and gas company, but there isn’t any active production.
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Producing Mineral Rights: These are actively generating royalty income from oil or gas wells.
Each type has a different market value and potential for income. Whether you inherited mineral rights or bought them as an investment, understanding what you actually own is the first step in making smart decisions. That’s especially true if you’re thinking about selling.
If you’re not sure what kind of mineral rights you own, we can help. At Texas Royalty Brokers, we specialize in helping mineral owners figure out exactly what they have and what it’s worth. Then we help you get real offers from serious buyers so you can make the most of your mineral rights ownership.
Estimating Mineral Rights Value in Pecos County
Estimating the value of oil and gas mineral rights in Pecos County can be a complex process, as it depends on several factors such as the location of the mineral rights, the production history of the area, and current market conditions.
Non-producing mineral rights, which are mineral rights that have not yet been leased or developed, are typically worth between $0 and $500 per acre. This is because there is no guaranteed income from these rights, and the value is mainly speculative.
Mineral rights that are leased, on the other hand, are worth 2x to 3x the lease bonus amount. The lease bonus amount is the initial payment made by the oil and gas company to the landowner in exchange for the right to explore and develop the mineral rights. The value of leased mineral rights is higher than non-producing rights, because there is a potential for income from royalties.
Finally, producing mineral rights are worth 3 to 6 times the 3 most recent royalty statements. Royalty statements are the income received by the mineral rights owner from the oil and gas production on their land. Producing mineral rights are worth more than non-producing or leased rights, as they provide a guaranteed income stream.
It’s important to note that this is a general overview, the value of mineral rights can also depend on the specific location, geology, production history and current market conditions. A professional mineral rights broker can help you to estimate the value of your mineral rights by helping you get competitive bids to establish a concrete market value.
Should You Sell Your Mineral Rights in Pecos County?
If you own mineral rights in Pecos County, you might be wondering if now is a good time to sell. The truth is, there’s no one-size-fits-all answer. But there are some key things to consider that can help you decide what’s right for you and your situation.
First, let’s talk about why people choose to sell their mineral rights. A lot of mineral owners sell because they want to turn an uncertain asset into guaranteed cash. Mineral rights are valuable, but that value can go up or down based on oil prices, drilling activity, and market demand. Selling oil and gas royalties can be a smart move if you want to reduce risk, simplify your finances, or reinvest the money elsewhere.
Here are a few common reasons people decide to sell:
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They inherited mineral rights and don’t have experience managing them
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There’s no current income from the rights, and the future is uncertain
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They want to cash out while values are high in active areas like Pecos County
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They need money for retirement, debt, college tuition, or other priorities
On the flip side, holding onto your mineral rights might make sense if you’re currently receiving solid royalty income and you’re comfortable with the ups and downs of the oil and gas market. But even in that case, it can still be worth getting your rights evaluated to see what they’re really worth on the open market.
One big mistake we see is people jumping at the first offer they get in the mail. Most of the time, those are lowball offers from buyers hoping to get a deal. If you’re thinking about selling, the best way to protect yourself and get a fair price is to work with a qualified mineral rights broker who can get your rights in front of multiple serious buyers.
At Texas Royalty Brokers, we help mineral owners in Pecos County and across Texas get top dollar for their assets. We market your rights to a large network of vetted buyers, generate competitive bids, and help you understand your options every step of the way. Most importantly, we do all the heavy lifting so you don’t have to.
Whether you’re ready to sell or just curious about your options, it never hurts to know what your rights are worth. We offer a free consultation and valuation so you can make an informed decision with confidence.
How to find Mineral Buyers in Pecos County Texas
Many mineral rights owners will receive letters in the mail from companies that are interested in purchasing their mineral rights. However, these offers are often low-ball offers, and it’s important for mineral rights owners to get multiple competitive bids to ensure they are getting a fair price for their assets.
One way to find mineral buyers is through a Google search. There are many companies that advertise their services online, but it’s important to note that these buyers may not be legitimate. It can be difficult to verify the credibility of these companies and the offers they make.
The best way to find mineral buyers is by listing the mineral rights at Texas Royalty Brokers. Texas Royalty Brokers is a well-established company that specializes in brokering high value mineral rights in Texas. They have a wide network of buyers and can help mineral rights owners to get the best price for their assets.
Inherited Mineral Rights in Pecos County?
Many mineral rights owners who inherit mineral rights decide to sell them for a variety of reasons. One reason is that they may want to diversify their investments, as owning mineral rights can be a high-risk investment. Additionally, mineral rights ownership can be complicated and time-consuming, and some people may not have the expertise or desire to manage them.
Another reason why some mineral owners decide to sell inherited mineral rights is because of the tax advantages. When mineral rights are inherited, they are typically subject to step-up basis tax treatment. Selling the mineral rights can help to reduce the tax burden, as the proceeds from the sale may have very little tax impact.
Mineral Rights Taxes in Pecos County
Royalties received from mineral rights are considered ordinary income and are taxed at the same rate as income from a job. This means that the income is subject to federal income tax and state income tax, and must be reported on the owner’s tax return. This means most mineral owners will pay 30%+ combined tax rate for royalty income.
Inheriting mineral rights can also have tax implications. Inherited mineral rights receive a step-up in basis tax treatment, which means that the cost basis of the mineral rights is adjusted to their fair market value at the date of the owner’s death. This means that when the inherited mineral rights are sold, the capital gains tax will be based on the difference between the fair market value at the date of death and the selling price, rather than the original cost basis. This can result in a lower tax liability when selling inherited mineral rights. We explain this in depth including example in our mineral rights tax article.
It’s important to note that tax laws are subject to change, and mineral rights owners should consult with a tax professional to understand the tax implications of owning mineral rights in Pecos County.
Buying Mineral Rights in Pecos County
Looking to buy mineral rights in Pecos County? You’re not alone.
With strong oil and gas production in the area, Pecos County continues to be a hot spot for investing in oil and gas. Whether you’re looking for producing rights with steady income or non-producing acreage with long-term potential, there are plenty of opportunities out there.
At Texas Royalty Brokers, we connect qualified buyers with mineral owners who are actively looking to sell. If you’re a serious buyer, we can help you find high-quality deals that match your investment goals. Check out our mineral rights for sale in Pecos County Texas.
New to oil and gas investing? Learn more about how to buy mineral rights.
About Texas Royalty Brokers
If you’re thinking about selling mineral rights in Pecos County Texas, it’s important to work with a qualified professional who understands the industry. The process of selling mineral rights can be complex and time-consuming, and it’s essential to have an expert on your side to help you navigate the process and ensure you get the best price for your assets.
One company that can help you sell your mineral rights is Texas Royalty Brokers. Texas Royalty Brokers is a well-established company that specializes in brokering high value mineral rights in Texas. We have a wide network of mineral buyers and can quickly get you competitive bids for your mineral rights. We can also help you to understand the value of your mineral rights and guide you through the process of selling them.
Working with a qualified professional is an important step to help you to get the best price for your mineral rights. We can quickly get you competitive bids and help you to understand the value of your mineral rights. This can help you to make an informed decision and ensure you get the best return on your investment.
