Selling Oil and Gas Royalties
By Elle Wood

Selling oil and gas royalties can be a very lucrative venture. You must take it upon yourself to become educated on the nuances involved in this process. The people you will be conducting business with will more than likely be a professional company that has vast experience with these types of acquisitions. Arming yourself with the knowledge to confidently negotiate will give you the advantage.

First, know whom you are dealing with. Today there are thousands of public and private interests vying to buy up the royalties to these resources. Many of them are independent brokers who conduct acquisitions of mineral leases. Understand that if you are dealing with brokers they have no authority to negotiate with you. They must obtain approval from their client before accepting any offers.

This leaves you with the edge. Do not accept the primary offer this is the baiting bid and is usually on the low end of what the client is willing to offer. Negotiate the terms that you want, do not accept anything less. The deck lies stacked in your favor, but there are some things to consider such as how much of the mineral is in your possession, the location of production, and competition for leases. Negotiations should be handled with care.

Discuss the bonus amount of the lease, the percentage of royalties shared and the initial terms of the lease. Any bonuses and royalties will be vastly different from location to location and are initially based on the three factors previously stated. On average, lease terms hover around the three-year mark. Be careful not to agree to an extension that will give the brokerage leverage in renegotiations at the end of the lease.

Royalties will vary considerably based on certain criteria. As a general rule of thumb 12% is considered the low end while 25% is the top of the spectrum for royalties. A checklist of favorable terms will give your the added security of knowing that you are not being taken advantage of. A Vertical Pugh Clause releases all depths under the deepest production zone. The Horizontal Pugh Clause in contrast, releases all land not included in the unit being negotiated.

It is advisable to forgo the "Mother Hubbard Clause" altogether while limiting the lease to oil and gas only. It is also preferable for you to have the warranty of title deleted. These items are standard requests that are usually accommodated without incident. Once acquired, the brokerage will begin the process of negotiating. There will be counter offers based upon your outlined lease terms. Be diligent during the negotiating process and you will succeed.

The information provided in this article will aid you in the process of selling oil and gas royalties. The topics covered were typical buyers, what to expect in the negotiating process, and favorable lease terms to include in your negotiations. After reading this article you will be ready to sell your oil and gas royalties with ease.

Elle Wood alerts you to companies and organizations that have your best interest at heart. For additional information that includes the processes to sell oil and gas royalties please visit http://www.uniroyalties.com

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Passive Income From Oil And Gas Investments
By Aaron Loh

Compared to traditional investments, the right direct investment in oil and gas may provide solid returns with monthly cash flow, particularly in today's high oil and gas markets. In addition, direct investments in oil and gas can provide tax advantages which are not available with stocks and bonds. Furthermore, being diversified with direct investments in oil and gas can provide a hedge against the impact of high or rising energy prices on other asset classes.

Some potential advantages of direct investments in oil and gas may include:

• Potential payback between 2-4 years;
• Tax deductions not available to other investment classes;
• Years of regular cash flow;
• An investment which is less impacted by the 'up and downs' of the stock market and interest rates;
• Diversification of your investments.

However with direct investments in oil and gas, there is the possibility of the loss of a portion, or all, of the investment principal if the well or wells are unsuccessful. Furthermore certain direct investments are relatively illiquid and very difficult to sell to others.

Certain direct investments in oil and gas provide a monthly payment for the oil and natural gas sold during the month.

Investments in oil and gas are less dependent on the economy or interest rates compared to traditional investments like stocks and bonds. As a result, these investments may provide a hedge against a downturn in the economy, particularly if the downturn is the result of a shortage of oil and gas.

Traditionally, investing in Oil and Gas fields has always been the territory of the qualified investors. However, a company called OilPods is determined to change this. It opens up the opportunity to retail investors to participate in the acquisition of Oil Leases of Productive Oil fields for the purpose of acquiring an income asset that through its daily production of crude oil will generate a monthly positive cashflow income for the investors. Just how secure is such method?

The company carves out 7.5% of its first lease's "Working Interest". For example, this lease is called the Zullig Project. The 7.5% of the Zullig Project is in turn divided into 240 units for individual investors to invest in, through OilPods.

OilPods offer investors a cashflow or income instrument where the monthly returns may be cashed out or re-invested to increase the constantly "income" producing units. This directly increases the cashflow return to the investors monthly.

The duration of the return depends on the mineral reserves in the land. The first monthly income payable to investors commence immediately upon the completion of title transfer, which currently takes 6 months from the date of contract. The conservatively projected return is between 7 to 15%.

OilPods collaborates with US based, Powder River Basin and Gas Corporation (www.powderrivergascorp.com/), a publicly traded Colorado corporation trading under the symbol PRVB. PRVB acquires and explores Oil and Gas properties. Lets examine the income statement of PRVB.

For FY2006 - 2004,

Net Income : $5,725,000 $699,000 $1,008,000

Cash And Cash Equivalents : $2,733,000 $383,000 $169,000

Income Before Tax : $8,757,000 $1,511,000 $1,008,000

The Company's net revenues from oil and gas sales for the first six months of 2007 increased to $1,566,833 from $795,797 for the first six months of 2006. This represents an increase of $571,036 or approximately 71.8% over the previous year. The Company also had net revenues from working interest sales of $9,540,843, an increase of $325,843 or approximately 3.5% over the same period of 2006. Powder River Basin Gas Corp. had a net profit of $6,813,727 before income taxes for the first six months of 2007. This represents a Basic Income Per Common Share of $0.04.

PRVB delivered a set of good financial results. Despite such, its share price has been plunging from highest $0.46 to the current $0.23 (on Nov 1, 2007). For the past few years, PRVB didn't declare any dividend payout to shareholders, cited reason such as capital for business expansion. Could it be this reason that investors start to abandon PRVB shares causes it to depreciate?

Nontheless, with the recent high oil price, early birds of OilPods investors are definitely on cloud nine! For keen investors, please visit www.oilpods.com/ for more information.

Aaron Loh
Founder and Director of Wealth Learning International
http://www.aaronloh.com

Aaron Loh is an avid learner and is always in the pursuit for success in what he's passionately involved in - helping others to constantly learn and upgrade themselves. He faced many setbacks and challenges in this journey. With his strong commitment and determination, plus God's blessing, he successfully changed the lives of thousands and thousands of people.

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