Landowners who also own their mineral rights may not know how to get the most from them.
Cameron Wyatt, a petroleum engineer and chief executive officer of Heritage Energy Corp. in Regina, connects buyers and sellers through MineralRights.ca
“I saw an opportunity via discussion with colleagues, friends and family,” he said.
Wyatt, who has spent 15 years in the industry, grew up on a southeastern Saskatchewan farm amid the resource sector and where most of the freehold mineral rights are located.
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He said that instead of waiting for energy companies to come to them and then taking a kitchen table offer that may or may not be a good one, landowners can engage his company to help them find prospective partners. Similarly, he said his company gives resource companies a way to find out which landowners are willing to do business.
The website allows landowners to advertise their rights to prospective resource companies, engage Wyatt’s company to obtain a valuation of the resource or find management partners.
Wyatt said landowners post their rights and see who is interested.
“We host silent auctions where resource companies bid for the lease or sale,” he said.
The company has hosted an auction every two months since it started in February 2014.
The auctions are confidential between the landowner and the bidders.
“It’s completely private,” Wyatt said.
He makes his money from what he describes as a “small listing fee” plus a percentage of bonus payments from the buyer and seller, but only if a successful deal has been negotiated.
Bonus payments are the upfront fee the buyer pays, while royalties are the percentage of gross income an owner would receive if and when mineral rights are developed.
Wyatt said landowners don’t necessarily choose the highest bidder. They might choose a company already doing business in their area.
Also, bidders could be other farmers or investors, and landowners have to decide how they want to proceed.
Wyatt said the royalties from production on freehold land are often higher than those paid on crown land. He wants landowners to get fair market value.
The value is what companies are willing to pay, but he said a valuation can determine the factors that come into that decision.
“It’s engineering driven, geology driven, formation driven,” he said.
“Everything comes down to the economics of getting that resource out of the ground.”
His company does business with freehold owners across Western Canada. Contact information is available on the website.
Contact karen.briere@producer.com
