# Who Buys Oil and Gas Royalties? Buyers, Prices and Multiples > Who buys oil and gas royalties, what a royalty buyer is actually purchasing, how the multiple on your monthly check is worked out, and how to check a royalty buyer before you answer. From a buyer in Tulsa. Source: https://www.berlinroyalties.com/who-buys-oil-and-gas-royalties/ Publisher: Berlin Royalties, a veteran-owned oil and gas mineral and royalty buyer in Tulsa, Oklahoma, buying for its own account since 2014. Call or text 918-984-1645. License: free to quote and cite with attribution to Berlin Royalties and a link to the source URL. Who Buys ## Who buys oil and gas royalties? A royalty is not the same asset as a mineral acre, and the people who buy it are pricing something specific: a declining stream of monthly checks. Here is who buys it, what they are actually valuing, and how the number in your letter gets made. [What Is My Royalty Worth?](https://www.berlinroyalties.com/free-valuation/) [Check an Offer](https://www.berlinroyalties.com/offer-checker/) Oil and gas royalties are bought by the same five categories that buy minerals: direct buyers who hold, funds and public royalty companies, brokers, marketplaces, and volume mailers. What changes with a producing royalty is that everybody can see the cash flow, so the disagreement moves from *whether* it is worth something to *how long* it will last and *what* price it gets paid at. ## What a royalty buyer is actually buying Not acres. A royalty buyer is buying a stream of monthly payments that will decline, and then continue at a low level for a long time, and then stop. Almost the entire disagreement between a low offer and a high one lives in three assumptions: - **The decline rate.** Shale wells fall hard in the first two years and then flatten. Conventional wells decline slowly from the start. Applying a shale decline curve to a fifty year old conventional well produces a number that is far too low, and it happens constantly because the formula does not know which one you own. - **The price deck.** Spot price is close to irrelevant to a twenty year stream. What matters is the forward curve, and a buyer using a flat deck has made a conservative choice they should be willing to explain. See [the curve and the headline](https://www.berlinroyalties.com/oil-scout/the-curve-and-the-headline/). - **Undrilled locations.** The part nobody puts in the letter. If your tract has remaining locations, a large share of true value sits in wells that do not exist yet, and a buyer who prices only your producing wells is buying that upside from you for nothing. Everything else is arithmetic. Ask for those three numbers and most offers explain themselves. ## The multiple, and why the number sounds bigger than it is Royalty offers are usually built as a multiple of recent monthly income. A buyer looks at what you received over the last three to twelve months, adjusts for anything unusual in it, and applies a multiple. Two things about that multiple are worth knowing before you agree to one: - **It is a payback period in disguise.** A 48 month multiple means the buyer expects to be repaid in roughly four years, and to own everything after that forever. Whether that is a good trade for you depends entirely on how long your wells will actually pay. - **The base month matters as much as the multiple.** A high multiple on a suppressed month can be worth less than a lower multiple on a normal one. Check which months they used, and whether any of them included a one time adjustment or a period the well was down. The [offer checker](https://www.berlinroyalties.com/offer-checker/) will convert any specific offer into the payback period it implies and tell you what the buyer must be assuming to justify it. It deliberately will not tell you an offer is too low, because we cannot know that from a number alone. ## The buyers, and what each one wants from a royalty ### Direct buyers who hold Buying for their own account and keeping the stream. Their return is the royalty, so their interest is in being right about the decline and the remaining locations. They are usually willing to show the work because they had to do it. That is our category. **Berlin Resources LLC** takes title and holds, which you can verify in the grantee index of any county we have bought in. ### Public royalty companies and funds Publicly traded royalty vehicles and private equity backed funds. Many of them need to show growing distributable cash flow, which makes producing royalty in a core area genuinely attractive to them and makes small or non core packages a poor fit. They frequently have a minimum deal size that is not published anywhere. ### Brokers and marketplaces They do not buy your royalty. They introduce it to people who do, for a commission or a listing fee. Competition can genuinely raise your price on a clean, well documented producing royalty. On a small or complicated one, the same process can cost you time and leave a shopped interest sitting in the market. See [broker or direct](https://www.berlinroyalties.com/broker-or-direct/). ### Volume mailers Royalty owners are the easiest list in the business to build, because your name and interest sit in public records and in division order filings. That is why the mail arrives. A printed number that appears before anyone asked to see your check stub was produced by a formula, not by a valuation. ## Types of royalty, and whether they are buyable | What you own | Buyable? | The thing that changes the price | | Landowner royalty on minerals you own | Yes, deepest market | Decline rate and remaining locations || [NPRI](https://www.berlinroyalties.com/non-participating-royalty-interest/) | Yes | Whether it is [fixed or floating](https://www.berlinroyalties.com/fixed-vs-floating-npri/), which can change value by multiples || [Overriding royalty (ORRI)](https://www.berlinroyalties.com/overriding-royalty-interest/) | Yes, at a discount | It terminates with the lease, so lease term and held status are everything || Royalty in suspense | Yes, but slowly | Whatever is causing the suspense has to be cured first. See [unclaimed royalties](https://www.berlinroyalties.com/unclaimed-royalties/) || Shut in or non producing | Sometimes | Priced as future potential. See [non-producing minerals](https://www.berlinroyalties.com/who-buys-non-producing-mineral-rights/) || [Working interest](https://www.berlinroyalties.com/non-operated-working-interest/) | Different market | It carries costs, so it is valued net of them and buyers are fewer || [Wind and solar payments](https://www.berlinroyalties.com/wind-solar-royalties/) | Separate buyer pool | Contract term and escalators, not geology | ## You are allowed to sell part of it The most common thing a royalty owner does not know. You can sell a fraction of your interest and keep the rest, and it is an ordinary transaction rather than a favor. That is often the right answer when you need a specific amount of money and have no view on where prices go, because it takes the timing question off the table entirely. If a buyer will only take all of it, that is a fact about them, not about your options. ## Before you answer anyone - Find out what you own. Your check stub gives you the operator, the wells, and your decimal. [The statement decoder](https://www.berlinroyalties.com/royalty-statement-decoder/) reads it line by line. - Ask the three questions: decline rate, price deck, undrilled locations. - Get one competing number with the reasoning shown. - Check what your state already owes you on timing and interest, at [royalty payment laws by state](https://www.berlinroyalties.com/royalty-payment-laws/). Some problems that look like a reason to sell are just a payment the operator owes you. - Read [when not to sell](https://www.berlinroyalties.com/when-not-to-sell/) before you read any offer. ### Send us a check stub and we will read it back to you. What the wells are, what your decimal implies, what we think the stream is worth and how we got there. Free, no obligation, and we will tell you plainly if we think holding is the better answer. [Get a Free Valuation](https://www.berlinroyalties.com/free-valuation/) [Ask a Landman](https://www.berlinroyalties.com/ask-a-landman/) ## Related - [Who buys mineral rights](https://www.berlinroyalties.com/who-buys-mineral-rights/), and the same question [by state](https://www.berlinroyalties.com/who-buys-mineral-rights/oklahoma/) - [How much are mineral rights worth](https://www.berlinroyalties.com/mineral-rights-value/) - [The mineral buyer directory](https://www.berlinroyalties.com/mineral-buyers/) - [Questions to ask a buyer](https://www.berlinroyalties.com/questions-to-ask/) - [Division orders](https://www.berlinroyalties.com/division-order/) and [taking your royalty in kind](https://www.berlinroyalties.com/take-in-kind-royalty/) - [Taxes when you sell](https://www.berlinroyalties.com/mineral-rights-capital-gains-tax/) Berlin Royalties is the trade name of Berlin Resources LLC, a mineral buyer and a landman shop in Tulsa, not a law firm, a tax advisor or a commodities analyst. We are a potential counterparty to any sale you make. Nothing here is a price forecast or investment advice.