Frequent Asked Questions

Why Sell

Do you have questions? We have options.

[su_spoiler title=”Why would I sell my oil, gas, and mineral rights and/or royalty rights?” style=”fancy”]

Reason #1 – Time uncertainty:

While owning oil, gas, and minerals (“OGM”s) in Pennsylvania, Ohio, West Virginia and New York can now be lucrative due to the emergence of the Marcellus and Utica Shale plays, the timing aspect of getting cash in hand resulting from owning OGMs is uncertain. Many folks do not want to deal with, nor do they have the time to wait to collect. Folks only have so much time to wait. Royalties can generate a lot of income but the problem is that many landowners have absolutely no idea of knowing when they will get the royalty, or if they will even get a royalty. Drillers work on all different timelines and don’t have to drill if drilling in an area doesn’t fit their business model. Drillers that own old 12.5% royalty HBP leases, or larger companies that are more concerned with proving reserves versus selling product are especially apt to not be in much of a rush to drill. There is a lot of land to drill and develop, and a small amount of resources available to do the drilling. This means that oil and gas drilling and development can take months, years, or even decades, meaning that typically much time will pass between the present and when landowners will actually see a royalty check from oil and gas sales attributed to their land.

REAL LIFE EXAMPLE: Washington County, Pennsylvania. It is the most developed drilling county in western Pennsylvania as of 2012. The big land lease rush was in 2008 there. Major drilling started in 2009. In late 2012, almost 5 years later only some people are getting a good royalty check. By MPF’s own math, less than 10% of Washington County landowners get a good Marcellus Shale royalty check, and it’s the most productive county in western PA to date. So, most of the people that signed leases 5 years ago are still waiting for the big Marcellus drill rig to come. Or their wells have been drilled but they are waiting for pipeline to be built so that the oil and gas can be sold. In Ohio, folks are 3 years behind PA. It may be 10 or 20 more years before some folks get royalty checks. And it’s not just the drilling that needs to happen. Pipelines and production facilities have to be built also so that the oil and gas can be sold. Drilling and getting paid royalties just takes a lot of time, and more time than most folks usually think.

MPF takes the time risk of when exactly that the good Marcellus and/or Utica royalty producing wells will be drilled and put into production. Yes, royalties could only be months away. But it is much, much more likely it will be years or even decades before most folks get royalty checks. MPF also takes the uncertainty of how productive the wells will be, or what oil and gas will be worth in the future. OGM owners should also keep in mind that NATURAL GAS trades at very low prices right now.

MPF buys OGMs and the rights to collect the royalty payments in the future, and takes the time risk and uncertainty of drilling and development. In exchange for those rights, MPF pays OGM sellers cash now that they can keep, invest, use and spend as they see fit. MPF and their investment partners look very long term and hope that their investments will be profitable down the road. MPF and their investors are willing and able to wait. For OGM sellers, by selling they have access to a lump sum of money for their oil and gas now, instead of waiting, with much uncertainty, for an unknown stream of money to come in at some unknown time in the future. Selling OGMs removes this uncertain wait.

Reason #2 – Cash now versus later:

If you missed out on the land rush and a big lease bonus like your neighbors, or if you spent all of your lease bonus, selling oil and gas rights is a good way to cash in immediately on the Marcellus and Utica shale booms. Many folks may have spent lease bonuses and need more cash now, or don’t have the ability to wait months or years for royalty payments to begin.

MPF provides a way cash now for OGM owners, and is interested in purchasing HBP properties. Many folks may be “Held by Production”, or “HBP” as we call it, and therefore may have missed the lease rush and were unable to sign a lease. These folks will get paid a royalty when their property is drilled for Marcellus or Utica Shale gas, but there is much time uncertainty and no control over the timing of the drilling process. While income from a new lease is unavailable, and royalties may still be years away, selling the rights to a future royalty stream is a way for OGM owners to get cash now instead of waiting.

Reason #3 – Convenience:

Many landowners do not want to manage the royalties for years and years. Oil and gas drilling and development has the potential to last decades in the Appalachian Basin, and accordingly OGM management will continue for decades. Income taxes must be paid on the royalty payments. Auditing and record keeping must be undertaken to ensure that the driller is paying the correct amount each month or quarter. OGM interests typically must be passed down to heirs when the current owner passes away, becoming part of an estate and left to be managed by children or grandchildren. Estate and inheritance tax issues can arise, especially if many acres are owned. In the past many folks have found themselves in a situation where their royalties may have to be sold after their death anyhow to pay inheritance taxes that are based on their future value. When a farmer dies with a mortgage on their farm, the surviving children could be faced with having to sell the farm to pay off the mortgage: the same principal applies to OGM ownership. If a person dies with a well generating $200,000 in income per year, the IRS could value that income stream at 1.4 million dollars and look for hundreds of thousands of dollars in inheritance taxes. MPF professionally manages royalties and is in the business of addressing these issues on a day to day basis, and is equipped to handle royalty management where average folks may not wish to do so.

[/su_spoiler] [su_spoiler title=”I need some cash now but I don’t want to sell all of my oil and gas, I’d like to wait to see what happens. Can I sell part of my rights to raise cash now and hang onto the remaining rights for later?” style=”fancy”]

Yes. You don’t have to sell all of your oil and gas. MPF will consider buying a portion of them – half, a third, a quarter – whatever you would like to sell. Partially selling can be getting the best of both worlds to some degree. You will get cash now and if a well is drilled, you will be able to collect a portion of the royalties in the future also.

REAL LIFE EXAMPLE: We were able to buy OGMs from a very nice lady and her husband. They needed to raise money and sell half of their oil and gas in order to get enough money to buy a new house in cash. They had bad credit and didn’t want to wait to buy a house. They had old 12.5% wells on their property and couldn’t sign a new oil and gas lease to get a lease bonus on their 200 OGM acres. They were older and owned the property for years, but they wanted to enjoy some of the money from the oil and gas immediately. So they sold half of their OGMs and bought their house, and were very happy. They then waited 2 more years for the first Marcellus well to get drilled beneath their property. They were actually pretty lucky, they were the first ones in the neighborhood with a well. (Keep in mind that they had absolutely no control over when the lessee drilled their well and sold the gas.)

Even though they sold half of their oil and gas, their remaining half of their oil and gas still generated a royalty check for them of about $15,000 per month. They’ll have that revenue to collect periodically but also have the option to sell the remaining 100 OGM acres. They were very happy because they didn’t have to wait 3 years or more to get into their new house and they are still getting a nice royalty check. The OGM buyer was happy because he is getting some of his money back now and will make a profit over the long term. That was a win-win transaction for everyone.[/spoiler]

How does MPF and its investors make money?

MPF works for its investors and is paid by its investors and buyers. MPF’s investors and buyers make money by owning and holding OGM rights, typically over a period of 5-10 or more years. MPF’s investors and buyers are hoping that long-term development of the Marcellus and Utica Shale plays will result in a cumulative gain on their investment portfolio. By buying multiple properties in different locations, MPF’s investors and buyers can lower risk of investment loss and increase potential for gain whereas a single property owner with property in one location cannot.[/su_spoiler] [su_spoiler title=” I am interested in selling and would like a free evaluation and quote, how do I get a proceed?” style=”fancy”]

MPF will need a little information from you first so that we can get you a quote:

1) How much money are you looking to raise?

2) Do you want to sell all or part of your oil and gas? If part, how much do you want to keep?

3) What kind of oil and gas lease is on the property now? Who is your LESSEE (driller), what is the royalty, when does the lease expire, etc.? (having a copy of your oil and gas lease handy helps us)

4) What are your property tax parcel numbers? (these are on your property tax bills or deed, having your tax bills and deeds handy helps us)

5) If you are in production and get a royalty check, we would need to see a copy of your royalty check stubs.

6) Do you own surface rights, and do you want to sell or keep those rights? (MPF buyers will consider buying surface)[/su_spoiler] [su_spoiler title=”How does your free evaluation work?” style=”fancy”]Our “free evaluation” is MPF’s own in-house grading of your property that MPF uses to provide you with a quote. We grade properties on an A-F scale (just like school grades) as to the desirability of the property to MPF based on the following criteria:

1) Existing lease terms

2) Existing lease royalty rate

3) Proximity to production and royalty income

4) Type of production documented in the area of the property

5) Actual production results, if any[/su_spoiler] [su_spoiler title=”If I agree to your quote, how is the transaction finalized?” style=”fancy”]At MPF we try to make closing the transaction simple for the seller. The procedure is similar to the procedure when selling a house or other piece of real property. MPF will draft a purchase and sale agreement and send it to you, the seller, to review and sign. YOU DO NOT NEED A LAWYER TO CONTINUE BUT IF YOU WANT A LAWYER TO HELP YOU THIS WOULD BE THE TIME TO GET YOUR LAWYER INVOLVED. The purchase and sale agreement will have “contingencies” to close in it, and closing may be scheduled within 30, 60, or 90 days depending on the property. TYPICALLY after we evaluate a property our only contingencies will be that the seller indeed owns the OGMs and their title is clear and marketable for oil and gas development, although this varies from transaction to transaction and is a negotiable term, as additional contingencies could be necessary for our investors. After contingencies are met, the seller will be required to execute a mineral deed, and MPF will close and pay you by bank wire, check or certified check.[/su_spoiler] [su_spoiler title=”Interested in getting an Oil & Gas Lease instead?” style=”fancy”]

MPF can help connect you with reputable professionals that handle oil & gas leases everyday.

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If you need further information, or have a questions, it doesn’t hurt to call us and ask!

Call Us At: 1-855-5-MPF-GAS  (1-855-567-3427) or 412-894-7125, fill out our easy online offer form or email us at .

Fax Us At: 412-317-1589.

Mail Us At: P.O. Box 278 Bridgeville, PA 15017