Meramec Rich Royalties LLC, a 1031 exchange-eligible oil and gas royalty offering sponsored by Resource Royalty LLC, has been fully subscribed after raising $16 million in investor equity.
Resource Royalty’s recent offerings have focused on acquiring mineral and royalty properties in the STACK region of Oklahoma, where multiple pay zones with recoverable oil and gas reserves were discovered in 2014. The company has acquired more than 84,000 gross royalty acres in 122 properties in the STACK, which is an acronym for Sooner Trend (oil field), Anadarko (basin), Canadian and Kingfisher (counties).
When energy companies drill oil and gas-producing wells, they are required to make royalty payments to the land owners that typically range from 12.5 percent of the gross revenue to as high as 25 percent for highly desirable properties.
“Our ability to produce industry leading returns has been greatly aided by concentrating on core acreage in the prolific STACK region,” says Bob Howard, president of Resource Royalty. “We buy minerals under very seasoned operators and have been rewarded with some of the best wells ever drilled in Oklahoma.”
The company has closed seven 1031 exchange-eligible royalty offerings since 2015 and believes that “demand for the offerings has grown due to the increased awareness that oil and gas royalties are eligible as replacement property for 1031 exchanges.”
Resource Royalty was founded in 2011 and has sponsored 13 investment or exchange offerings that raised in excess of $95 million.