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Unity Resources

1031 Exchange | Oil & Gas Replacement Property

Capital Gains Tax Deferral via 1031-Exchange

1031 Exchange: Since the early 1940s, investors have enjoyed the option of investing all or part of the proceeds of a traditional Real Estate sale into oil and gas minerals with capital gains tax deferral benefits. Subsurface minerals and royalties are considered Real Property; ownership is conveyed by deed. In most cases, the investment is considered like-kind Replacement Property for the purposes of a 1031-Exchange.
Mineral & Royalty Interest ownership shares several characteristics with traditional Real Estate.

Hard Asset Ownership

Subsurface Minerals & Royalties are considered real property. Ownership is conveyed by deed. The property is 1031-Exchange Eligible. In Unity’s case, interest ownership includes small acreage positions in many different unitized sections and/or geographically diverse fields.

Cash Flow Potential

Royalty cash flow is generated from a well’s monthly production sales. Additional cash flow may be realized as acreage is continually developed.

Underlying Value (O&G Reserves)

Market value of royalty interests is determined by the estimated value of reserves in place (as defined by existing and future commodities pricing). Continued development “proves” up additional reserves and adds to potential overall value. Mineral & Royalty Interest owners bear none of the liabilities and expenses of improvements and/or development.
 1031 Exchange