WHY SELL?

• Risk Reduction and Asset Diversification – Royalties are heavily dependent on fluctuating energy prices in the financial markets, as well as operator execution. Many owners choose to sell all or a portion of their interest and reinvest in other asset types in order to mitigate this risk.

• Financial Flexibility – A royalty sale provides an up-front, lump sum payment as opposed to waiting for a fluctuating check every month.

• Asset Reclassification – Royalty interests and well production deplete with time, reducing your principal value. Some interest owners choose to sell and invest in non-depletable assets such as real estate to protect their principal.

• Estate Planning and Liquidation – The sale of royalty can greatly simplify and reduce expenses related to estate planning and liquidation.

• Tax Advantages – Royalty payments are generally taxed at an ordinary income rate, whereas the sale of royalty is generally taxed at the capital gains tax rate.

• Hassle Reduction - Selling royalty interests removes the burden of related paperwork and accounting as well as the responsibility of paying the property taxes.