Replies to This Discussion

Permalink Reply by Greg on June 24, 2014 at 4:52pm

As collateral or as an income source?

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Permalink Reply by doug baker on June 24, 2014 at 5:15pm

As collateral for a loan.

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Permalink Reply by INVICTUS on June 25, 2014 at 7:58am

No banker in their right mind will lend on mineral rights.

The reason is they don't know how to price the asset or quantify the risk of the asset.

And even if they did, Federal guidelines won't allow them to incorporate that kind of risk in their portfolio, either to keep or to sell on any secondary market..

I would never sell mineral rights, either.

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Permalink Reply by Dexter Green on June 25, 2014 at 8:18am

Chinese banks have been using minerals and commodities as collateral for years now.  It came out last week that some of that collateral (read: hundreds of millions of $ worth of copper) didn't "exist" in the sense that the banks had hoped.

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Permalink Reply by Summer Johnston on June 25, 2014 at 9:18am

Yes, and Deutsche Bank loaned what, half a billion on Chessie's assets in the northern Utica?

And if Chessie defaults, DB can keep the collateral. ~

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Permalink Reply by INVICTUS on June 25, 2014 at 10:58am

Fair 'nuf. point well taken.

The poster is welcome to attempt the effort.

But we're not these big money entities, are we?

And he isn't talking about your local/regional/or even national bank.

The reference seemed to be retail banking, particularly in the USA.

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Permalink Reply by jonathan M. on June 25, 2014 at 11:18am

There are banks that will lend money on producing minerals. It's called reserve based lending. Don't know about non producing though...

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Permalink Reply by INVICTUS on June 25, 2014 at 11:31am

To a retail customer? at a retail branch? With little or no prior relationship in the O/G Business?

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