Frequently Asked
Questions

Royalty interests are the right to receive a percentage of revenue from the sale of oil and gas produced from certain wells, without bearing the cost of drilling and operating those wells. When you lease your mineral interests, you generally retain a royalty interest for any production occurring from the wells drilled on the leased acreage. This royalty is commonly between 12.5% and 25% of production revenue.

Surface rights grant ownership of the land’s surface (e.g., for building or farming), while mineral rights grant ownership of the subsurface resources. In many cases, the ownership of these two rights is the same for a given parcel of land, but in areas of the country with substantial existing oil & gas production, the mineral rights have often already been severed (meaning “split”) from the surface rights, which means one person owns the surface rights while someone else owns the mineral rights. Interestingly, the mineral estate takes precedence over the surface estate in most cases, which means surface owners cannot prevent a mineral owner in the same parcel from extracting their natural resources, provided the mineral owner pays the surface owner a reasonable fee for “surface damages” occurring on their acreage.

Mineral rights owners will likely receive a lease bonus at the time of initially negotiating and executing a lease with an oil & gas exploration & production company (aka an “operator”) who intends to drill wells on their acreage. If wells are drilled and production occurs, royalty payments based on the volume of oil or gas extracted and the agreed-upon royalty rate are issued to the mineral owner. Entitlement to this ongoing royalty payment is called the “Royalty Interest”. Additional, but often less significant, sources of income can include lease extension payments, delay rental payments, shut-in payments, and other event-based payments which are typically established in the lease agreement originally executed.

Allegiance Oil & Gas is a company focused on acquiring mineral and royalty interests on behalf of our investor group. With many years of experience in the industry, our team is dedicated to fair, honest, and transparent transactions. You can read more about each member of our team on the Our Team page.

We obtain mineral and royalty ownership information from publicly available records typically available at county clerk offices, such as tax rolls as well as deed and lease filings. These records help us identify potential mineral and royalty owners who might be interested in discussing a sale or partnership. We do not buy or sell personal data; rather, we rely solely on official, publicly accessible sources and reputable industry databases.

(1) Allegiance Oil & Gas invests its own capital into long-term investments on behalf of our investors – we are not “brokers” or “flippers” who will re-market your property and take margin. Because we invest our own capital for the long-term, we are able to make especially competitive offers and stand behind the offers we make.
(2) We take pride in our honest approach, thorough property evaluations, and commitment to closing transactions smoothly and efficiently. Our focus is on long-term relationships and maintaining our reputation in the industry – we will never jeopardize these for short-term profits.

Individuals sell for various reasons, such as estate planning, tax advantages, diversification of investments, immediate cash needs, or reducing the risk associated with fluctuating commodity prices. Selling provides a guaranteed lump-sum payment rather than waiting on monthly royalty checks which will vary in amount and will suddenly cease when the operator decides to plug the associated well(s).

We look at factors such as current production, commodity prices, expected future production, existing leases, and geological data. Our goal is to provide a fair market value based on a thorough analysis of your property.

Absolutely. We regularly work with mineral and royalty interests held in estates, trusts, business entities, or other legal structures. Our team understands the unique requirements and documentation involved, and we can tailor our approach to meet your specific situation. If you are a trustee, executor, or business representative, we’ll guide you through any additional steps or documents needed to facilitate the transaction and ensure compliance.

Yes. We purchase these interests and have a large quantity already in our investment portfolio.

Our primary focus is on acquiring mineral and royalty interests; however, we do consider working interests and non-producing interests on a case-by-case basis. If you have a working interest or a non-producing interest you’d like to discuss, please feel free to reach out. We’ll evaluate the specifics of your situation and let you know if it aligns with our investment criteria or if we can recommend another option.

Yes. Allegiance actively purchases mineral and royalty interests nationwide with no geographical restrictions.

Simply submit the Request an Offer form on this website to receive a personalized offer for your property. Or, if you prefer, give us a call at (281) 674-7131 or drop us a line at inquiries@allegianceoil.com to discuss your property and request an offer.

Absolutely not! All offers presented by Allegiance Oil & Gas are “no-obligation” offers, which means you have no obligation to move forward with any kind of transaction should you receive one.

Upon accepting our offer, we’ll prepare a Purchase & Sale Agreement, Conveyance, and any other closing paperwork required to effectuate the transfer of your interests, which will need to be executed in the presence of a notary. We will pay for all document preparation, mailing, & filing expenses. After a short title review & verification process (during which time your executed documents & our payment are held in escrow), we will send payment directly to your bank account via wire transfer, or we can issue a certified check if you prefer.

Timeframes vary based on the complexity of your ownership and the time required for title verification, but many transactions close within 3-4 weeks, which is similar to the typical closing period required for a home purchase.

To expedite your closing as much as possible, you will be asked to supply copies of your lease agreement(s), division order(s), royalty statements (aka “check stubs”), source Deeds/Conveyances, as well as any other relevant documents establishing proof of ownership. However, if you don’t have some or all of these documents, we can often help you obtain them.

Hiring these professionals is not required in order to divest your property. However, consulting qualified professionals can help you to fully understand the tax & legal implications of selling, so you may still wish to do so.

Selling your interests may trigger capital gains or other tax obligations. However, depending on how long you have owned the property and your income tax bracket, your capital gains tax rate may actually be lower than the income tax rate you are paying on your ongoing royalty income. If you have any uncertainty as to the tax implications of selling, it’s best to consult a tax professional who can provide guidance based on your individual situation.

In certain cases, mineral and royalty interests can be eligible for a 1031 Exchange. Speak with a qualified tax advisor to determine whether this strategy applies to your specific situation.

Allegiance Oil & Gas covers all standard closing costs associated with the transaction. If any uncommon or unexpected expenses arise, we’ll discuss them with you before proceeding so there are no surprises.

We respect our clients’ privacy and only share transaction details as necessary to complete the sale and comply with legal requirements. Note that, by law, a Deed or Conveyance must be filed in the county courthouse where your property is located, and this document will become part of public record once filed.

To discuss any questions or concerns you have, reach us at (281) 674-7131 or inquiries@allegianceoil.com. You can also request an offer for your interests using our Request an Offer form or submit a general inquiry using the form on our Contact Us page.