What is a junior oil and gas company?
Junior companies are typically small-cap, with a low market capitalization (usually under $500 million) and have thin daily trading volumes of 700,000 and under. They are most likely found in commodity exploration, such as oil, minerals, and natural gas. The company will then conduct a resource study.
What does a paid up oil and gas lease mean?
If a lease is a “paid-up” lease, then the lease will remain in effect during the entire primary term with no further payments to the Lessor unless and until actual production of oil or gas is established.
How does oil leasing work?
An oil lease is essentially an agreement between parties to allow a Lessee (the oil and gas company and their production crew) to have access to the property and minerals (oil and gas) on the property of the Lessor. The lease must be dated and the lease also sets the time that the lease is effective.
How do oil well royalties work?
Whenever oil or gas production begins, the landowner is entitled to part of the total production. A royalty is agreed upon as a percentage of the lease, minus what was reasonably used in the Lessee’s production costs. The royalty is paid by the Lessee to the owner of the mineral rights, the Lessor in the Lease.
How do junior mining companies make money?
These companies spend the proceeds from the shares they sell on mineral exploration and development, an activity that qualifies for certain tax credits and tax deferrals. These tax benefits “flow through” to investors in the fund.
What is junior mining company?
What is a junior mining company? A junior mining company is a company in the development and exploration phase of the search for new deposits of gold, silver, uranium or other natural resources.
Is mining good investment?
Although investing in mining stocks can be highly volatile, they often make good long-term investments. They may be well-known stars or quiet gems, but they do share one common attribute—they have grown at higher-than-average rates within the mining industry, or within the market as a whole, for years or decades.
What are the best junior mining stocks?
New Age Metals. New Age Metals is a green metals, mineral exploration company focused on the exploration and development of platinum group metals and lithium.
What is the average life of an oil well?
20 to 30 years
The average life span of an oil or natural gas well is 20 to 30 years. However, new technologies are being developed to find new ways to extend the life span.