If you own producing mineral rights in Texas, you’ve gotten a letter. Probably several. The pitch is always some version of: “Get your money now — sell us your minerals for an attractive lump sum.”

Sometimes selling is the right call. More often, it isn’t — and royalty owners get walked into a transaction worth substantially less than what the asset will actually generate. The four numbers below are how we’d think about it if it were our own family’s minerals.

Number 1: The multiple on offer.

Sale offers in 2026 land roughly between 36× and 60× monthly royalty income — meaning a $1,000/month royalty fetches $36,000 to $60,000 cash. Loans against the same royalty land between 12× and 24× monthly — so $12,000 to $24,000.

At first glance the sale wins. The sale offer is bigger. But that comparison misses the point.

Number 2: What the asset is actually worth.

An operating royalty in a Permian well doesn’t just produce for the next year. It produces, on average, for another 15–25 years on its existing trajectory — and often longer if the operator drills additional wells on the lease. The undiscounted income stream is usually several multiples of what a buyer is willing to pay in a one-time check.

Buyers are professionals. They model the decline curve, apply a discount rate that reflects their cost of capital plus a return target, and quote you a number that leaves them a comfortable spread. The “attractive lump sum” is attractive — to them.

“A sale is a permanent decision priced for someone else’s return target. A loan is a temporary one priced for yours.”

Number 3: The cost of the loan.

A 24× loan repaid from royalty checks over roughly 36 months — at typical TCT pricing — costs you a fraction of the value you’d give up in a sale at 50×. The arithmetic is straightforward: pay interest for 3 years, then your royalty checks resume flowing to you for the remaining 12–22 years of the asset’s life.

Walk through a quick example with a $1,500/month royalty:

  • Sale at 48×: $72,000 today. You give up every future check.
  • Loan at 20×: $30,000 today. Repaid over ~36 months from the royalty stream. After repayment, the royalty checks resume flowing to you for the asset’s remaining life.

If the asset has even another 10 years of life — and most do — the loan path leaves you tens of thousands of dollars ahead, plus you still own the mineral rights.

Number 4: The “what if” scenarios.

This is where the math sometimes flips. Two situations where selling can be the right call:

  • The asset is at end-of-life. If the well is shut in, the operator has stopped reporting permits, or production has fallen below the economic limit, the future income stream may be small enough that a sale outpaces a loan. We’ll tell you this if we see it — and decline to lend rather than steer you wrong.
  • Estate or partnership liquidity that exceeds the asset’s lending capacity. If you need $200,000 against a $400/month royalty, a loan can’t reach there. A sale might. (Or a hybrid: loan to the lending capacity, sell a fractional interest for the rest.)

The honest take.

About 80% of the royalty owners we talk to are better served by a loan than a sale. The remaining 20% genuinely should sell — and for those, we’d rather tell them so than write a loan we don’t believe in.

If you’ve gotten one of those letters and want a second opinion on whether selling is actually the right call, we’ll look at the numbers honestly. Send us your statements and we’ll come back inside 48 hours with our read — loan, sale, or neither.