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An oil and gas company, known as the Operator, executes an oil and gas lease of a section of land with the mineral owner to secure the right to drill a well. Royalty and mineral interests provide an opportunity for investors to step away from traditional real estate and diversify into a different asset class with exposure to different economics. The Operator, drills wells on this agreed upon section to extract the hydrocarbons beneath the surface. The oil and gas company pays all drilling and operating expenses and assumes all drilling risks and liabilities. Along with being eligible as 1031 Exchange – as long as the mineral and royalty interests are like-kind – the additional tax advantage is an approximate 15% (as every program varies) tax depletion allowance.