Peregrine Energy Partners has announced the closing of producing royalty properties in the Marcellus Shale from multiple private sellers. The natural gas acquisitions in Tyler County, WV under Antero Resources and Fayette County, PA under Chevron were both finalized in the first week of October.
As with many of the mineral owners Peregrine works with, the sellers recognized the opportunity to maximize the cash value of their property while minimizing the long-term tax liabilities. Both sought to re-deploy the cash proceeds into other areas of their financial portfolios where they had more control of the assets.
“As much as we liked the monthly income from our royalties,” one of the sellers noted, “this was an opportunity for us to take some chips off the table in what has been a pretty volatile natural gas market over the last couple of years. The lump-sum payout we were able to get allowed us to pay off a chunk of debt and move into more liquid investments.”
While most royalty owners are initially averse to selling their interest, many of those that Peregrine works with have found out the hard way what it means to be over-weighted in the unpredictable market that is commodities, including oil and natural gas.
Peregrine’s Managing Director, C.J. Tibbs commented, “For years the mindset of royalty owners has been to hang onto what they have because Granddad told them so. We’ve started to see more sellers look at their royalty properties objectively in understanding the moving pieces and then working to provide the most value for their families moving forward. It’s not so black and white after all.”