We publish this so you can see our work. The methodology is a discounted-cash-flow approach applied to royalty income, with explicit assumptions, decline-curve context, and offer terms where relevant. The output is a directional range, not a teaser number, and not a certified appraisal.
A discounted-cash-flow review models expected future royalty income from the section, applies a discount rate that reflects the risk of the cash flows, and arrives at a present-value range. The range is the directional assessment; the assumptions and the inputs are what make it useful.
The factors below are the primary inputs to the DCF. Each carries a different weight in the final range; we state the influence and the source so you can interrogate the result.
| Factor | What we look at | Influence | Source / reference |
|---|---|---|---|
| Production history | 12-24 months of historical production for the section, when available; older when younger is not. | high | Public Texas RRC data, operator disclosures, owner-supplied check stubs |
| Decline-curve context | Type of decline (exponential, hyperbolic), expected terminal rate, and basin context. | high | Operator decline-curve disclosures, MRX internal rate database |
| Operator quality | Operator track record in the basin: drilling cadence, completion efficiency, history of plugging and abandonment. | medium | Public operator filings, RRC enforcement actions |
| Royalty terms and depth | Royalty fraction, depth-of-rights (e.g., "Below the Barnett"), and any post-production deductions. | high | Owner-supplied lease and division order |
| Commodity price assumptions | A flat-line or conservative strip based on a publicly visible benchmark; we do not use undisclosed price decks. | medium | NYMEX strip or equivalent at the time of review |
| Discount rate | A risk-adjusted rate reflecting operator, basin, and title confidence. Stated explicitly in the deliverable. | high | MRX internal rate card; reviewed periodically |
| Title and acreage | Mineral-acreage confirmation, partial-interest flag, multi-heir splits, and any encumbrances. | high | Owner-supplied title documents, county records |
| Offer terms (if any) | Clawback provisions, effective date, post-close obligations, depth of rights conveyed. | high | Owner-supplied offer letter or LOI |
| Tax and estate posture | Whether the interest is held individually, jointly, in trust, or via an estate. Affects structure, not the DCF range. | low | Owner confirmation; MRX does not give tax advice |
A published methodology is not the same as a regulated certification. We state the limits explicitly so the output is not over-read.
”Appraisal” is a regulated activity in Texas. Our review is a directional underwriter assessment. When a certified valuation is required (estate, certain tax filings, certain court matters), the right move is to engage a Texas-licensed appraiser; we are happy to help you think through when that makes sense.
Our team does not provide legal or tax advice. We help you think through the questions worth asking a Texas-licensed attorney and CPA, and we recommend verifying ownership, royalty, tax, and production assumptions with qualified professionals before any transaction.
Markets move, operators change, and title surprises happen. A directional range is a present-value view of expected cash flows under stated assumptions. It is not a guarantee.
A single number is almost always a teaser. The output of the review is a range with the assumptions stated, so you can see how the answer moves when the inputs change.
No. The methodology is published to show our work, not to claim a regulated certification. Our review is a directional underwriter assessment. For certified work, owners often consider hiring a Texas-licensed appraiser; we are happy to help you think through when that makes sense.
A range, with the assumptions stated. A single number is almost always a teaser.
Production history. Recent and historical production data, decline-curve context, and operator activity are typically the most informative inputs. Everything else is layered on top.
A free, confidential underwriter review. The output is a directional range with the assumptions stated. No card. No obligation.
No card required. No obligation. Confidential review.
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