If you sell your oil and gas royalty interest or mineral rights, you exchange your ownership in the property for immediate cash. A lump sum payment could be used to invest in low risk investments such as a money market account or a Certificate of Deposit (CD). While most oil and gas properties produce less volume over time, your future investments have the opportunity to appreciate in the future, whether it be the stock market, real estate, or another opportunity.
Keeping track of royalty interests and income can be a burden, even for small owners. Often, tax consultants who are not in the oil and gas business are not aware of the rules regarding accounting for such income, and may not be calculating your tax burden correctly or taking advantage of such things as cost or percentage depletion.