Diversification

Haymaker is funded by global investment firms. We further diversify by acquiring minerals across the entire country. If oil prices fall, or if we otherwise overpay in a particular area, we are protected by other investments within our portfolio. If you are not similarly diversified, it may be time to consider the risks of having a large part of your net worth concentrated in a single area. We encourage you to sell a portion of your minerals in order to diversify your asset holdings, while still remaining invested in the properties.

Lump Sum Payment

Owning producing minerals is like having a winning lottery ticket. Most lottery winners choose the lump sum payout because they do not know what will happen in the future. There is a chance that in your lifetime you will never receive as much royalty income as we are willing to pay you right now. Unlike the lottery, we offer the best of both worlds by allowing you to sell a portion today while still receiving variable income over time.

Reduce Risk and Volatility

Over the last few years we’ve seen wild fluctuations in oil from $60 to $26 and natural gas from $4 to $1.50. We’ve also seen certain counties go through a few months of increased drilling activity, only to get quickly abandoned by the operators once a new play is discovered somewhere else. Nobody can tell you where prices will go, or which operators will stick around. If you’re not comfortable with this level of risk and volatility, you may want to consider converting some of your minerals into cash.

Estate Planning

If your heirs do not understand the oil and gas business as well as you do, they may make poor decisions with the minerals in your absence. It is always easiest to leave cash to your heirs.

Other Obligations

A lump sum payout can help eliminate debt, purchase a new home, or cover college expenses.

Tax Advantages

Taking long-term capital gains from a sale may be more efficient than being taxed on ordinary income every year. Consult with your tax advisor.