Any sale is simply a transfer of risk. Mineral buyers (or any investor for that matter) are only answering a single question at the end of the day: “Is my potential reward appropriately sized relative to the risk I am taking?” This is all investing is at the end of the day. Mineral buyers don’t have a crystal ball. If they did, there would have been exactly zero mineral sales in the last 6 months. Unless the mineral buyers priced in the possibility of a 90% drop in prices, every investment they made in the last year is underwater at this point.
2 Likes
I’m not sure that the thought that the price that minerals were selling for in the past were prices that will likely never be offered again is accurate. At this point, I have been through three of these downturns in the oil and gas industry. Each time we saw much wailing and gnashing of teeth and renting of garments. Prices have always come back, and I don’t see a reason in the current downturn why they won’t come back this time. Just sayin…
1 Like
This topic was automatically closed after 90 days. New replies are no longer allowed.