MineralSoft recently launched a five part blog series on the top ways mineral owners are underpaid on their interests. On a related note, Drillinginfo (our parent company) just published a great blog on the generational transfer of mineral wealth and the pitfalls that can impact a family’s mailbox money.
Things can fall through the cracks even with the most seasoned mineral investors, underscoring why it is so critical for families to pass on their mineral rights as well as knowledge to the next generation. Without that knowledge transfer, those who inherit mineral interests will struggle in navigating complexities, such as Pugh clauses, depth severances, continuous drilling provisions, and mineral reservations. And that’s a risky situation that all too often results in these mineral owners getting underpaid, either because they aren’t looking out for the types of underpayments on our list or because they sell interests at a less than favorable return.
Here’s a short excerpt from the DI blog, titled Having… the… Talk:
Not a day goes by without various financial planners lamenting the dire state of the average American’s savings nest egg— the asset that should be seeing them through their retirement years in relative comfort.
I have to say that I have NEVER seen any information from anyone urging aging parents to compile and clarify their mineral estates so their heirs can make the most of the mineral estate they will inherit.
The generational transfer of mineral wealth over the next 10 to 20 years will be massive. I’m afraid in many cases it will be chaotic, uninformed, and incomplete. If I’m right, the potential for wealth destruction is huge.Drillinginfo Blog