If you own minerals or royalties, the question almost always starts the same way. A check arrives, or a letter offers to buy, and you want to know one thing: what is this actually worth?
It is a fair question, and a harder one than most letters make it sound. Value is not a single fixed number stamped on your interest. It depends on what you own, where it sits, who is operating, and what the market will pay for future production that, by its nature, declines over time.
Below is how our team thinks about value. The goal is not to sell you on a figure. It is to help you read your own asset clearly, so that whatever you decide to do next, you are deciding with the full picture.
Start with producing versus non-producing
The first dividing line is whether your interest is generating revenue today.
- Producing minerals or royalties have wells on them paying you now. Value here leans heavily on current cash flow and the expected future production from those wells.
- Non-producing interests have no wells yet. Value rests on the potential for future drilling, which is harder to pin down and depends on the operator's plans, nearby activity, and economics that can change.
A producing interest is generally easier to value because there is real production history to study. A non-producing interest carries more uncertainty, which usually means a wider range of opinions on what it is worth.
Your net revenue interest is the real number
People often describe their interest in acres. Acres matter, but the figure that drives revenue is your net revenue interest, usually expressed as a decimal.
Your decimal reflects your share of production after the lease royalty and any other burdens. Two owners can each hold the same number of acres in the same section and receive very different checks, because their decimals differ. Before anyone can value your interest seriously, they have to confirm that decimal against the records. A number based on a guess about your ownership is just a guess about your value.
Location, operator, and lease terms
Where your minerals sit shapes nearly everything else.
- Basin and location. Acreage in the heart of an active area, close to recent strong wells, is generally valued differently than acreage on the edge of development. Geology and proximity to existing production matter.
- The operator. A well-capitalized, active operator with a track record of drilling tends to support value more than one with little activity or uncertain plans. Who controls the development of your acreage affects when, and whether, future wells get drilled.
- Lease terms. Your royalty rate, any post-production cost deductions, and the status of the lease all feed into what your interest produces and, in turn, what it is worth.
None of these are minor details. They are the difference between two interests that look similar on paper and trade at very different levels.
Commodity prices and the decline curve
Two forces pull on value constantly: the price of oil and gas, and the steep decline of modern wells.
Commodity prices move daily, and your future revenue moves with them. An offer made when prices are high reflects a different outlook than one made when prices are soft.
Decline is the part many owners underestimate. Unconventional wells produce a large share of their recoverable reserves early and fall off sharply. In the Permian, first-year declines often run roughly 60 to 75 percent. The Eagle Ford typically declines around 70 percent in the first year, with much of the rest of its recoverable reserves coming out over the following year. The Haynesville, a dry-gas play, is steeper still, often around 80 percent in year one. Exact figures vary by basin, operator, and the well's vintage.
This is why minerals are frequently called a "wasting asset." The check you receive this year is usually larger than the check the same well pays a few years out. A sound valuation does not just look at last month's revenue. It models how that revenue is likely to fall, and what new drilling, if any, might add back.
Why one mailed number is not market value
A single unsolicited offer tells you exactly one thing: what that one buyer is willing to pay, on that day, for the information they happen to have. That is not the same as market value.
Market value is what your interest draws when it is shown to multiple qualified buyers who have studied it, run the engineering, and competed for it. The two numbers can be far apart, because a private offer carries none of that competitive pressure and often none of that analysis.
When our team evaluates an interest, the work is grounded in engineering and geology: production history, well performance, decline modeling, operator activity, and a careful read of the ownership and lease terms. When an owner chooses to sell, we run a transparent, market-driven process through a network of buyers so that value is revealed rather than assumed. The aim is for the market to set the number, not a single letter in the mail.
Small owners and large owners get the same work
There is a common worry that a smaller interest is not worth a serious look. It is. The drivers of value are the same whether the decimal is large or small, and the analysis we apply does not change with the size of the check.
A smaller interest still deserves a confirmed decimal, real engineering, and a clear explanation of what is driving the range. You should never feel that your ownership is too modest to understand fully or to have valued with care.
Where to go from here
Understanding what your minerals are worth starts with understanding what you actually own and how the market views it. That is a conversation, not a number on a postcard.
There is no cost to start a conversation and no obligation to accept an offer. If you would like a clear, grounded read on your interest, Start a conversation with our team.
Common questions
Why is the offer in my mailbox different from what you would say my minerals are worth?
A mailed offer reflects what one buyer will pay on a given day, often without confirming your exact ownership or running detailed engineering. Market value is what your interest draws when multiple qualified buyers study it and compete. Those two numbers can differ significantly, which is why a single unsolicited figure is a starting point at best, not a measure of true value.
What information do you need to evaluate my interest?
At minimum, we need to identify your interest and confirm your net revenue interest, the decimal that determines your share of production. From there we look at recent check or revenue detail, the operator, lease terms, and the location of your acreage so we can apply production history and decline modeling. The more accurately we can confirm what you own, the more grounded the valuation.
Why does production decline matter so much to value?
Modern unconventional wells produce a large share of their recoverable reserves in the first couple of years, then fall off sharply, often well over half in the first year depending on the basin. Because future checks are typically smaller than today's, a credible valuation models that decline rather than assuming current revenue continues. This is why minerals are often called a wasting asset.
Is my interest too small to be worth evaluating?
No. The drivers of value are the same regardless of size, and we apply the same engineering and analysis to a small interest as to a large one. Every owner deserves a confirmed decimal and a clear explanation of what is driving the value range.
Does getting a valuation commit me to selling?
No. There is no cost to start a conversation and no obligation to accept an offer. Many owners simply want to understand what they own and how the market views it before deciding anything, and that is a perfectly good reason to talk.