f a Capital Call
• Liability to Governmental Authority Having Jurisdiction, Including Environmental Liability
• Liability for Costs of Exploration, Operation & Plugging
• Liability for Property Damage and/or Personal Injury caused by Operations, Fire or BlowoutAll investing presents a risk versus reward challenge that investors face when ever they chose to satisfy a 1031 exchange requirement in order to defer capital gains and recaptured depreciation on their investment property. The newest entrant to compete with tenants in common (TIC) investing is energy interests in oil & gas.

There is confusion as to what a royalty interest is and what a working interest is and how they compare. Each has its place in the risk versus reward scenario but more and more investors are favoring royalties over working interests because of the lack of liability involved. The investors we work with are typically at or near retirement age, desire steady income but above all else want to preserve their hard earned wealth. Consequently, they turn to Royalty Interests over Working Interest. Albeit the reward is higher with the working interest – it is not enough to off set the risk. We are in the business of capital preservation.

The liabilities involved are multiple in a working interest but the five greatest we have discovered are:

• Liability of a Capital Call
• Liability to Governmental Authority Having Jurisdiction, Including Environmental Liability
• Liability for Costs of Exploration, Operation & Plugging
• Liability for Property Damage and/or Personal Injury caused by Operations, Fire or Blowout<

n (TIC) investing is energy interests in oil & gas.

There is confusion as to what a royalty interest is and what a working interest is and how they compare. Each has its place in the risk versus reward scenario but more and more investors are favoring royalties over working interests because of the lack of liability involved. The investors we work with are typically at or near retirement age, desire steady income but above all else want to preserve their hard earned wealth. Consequently, they turn to Royalty Interests over Working Interest. Albeit the reward is higher with the working interest – it is not enough to off set the risk. We are in the business of capital preservation.

The liabilities involved are multiple in a working interest but the five greatest we have discovered are:

• Liability of a Capital Call
• Liability to Governmental Authority Having Jurisdiction, Including Environmental Liability
• Liability for Costs of Exploration, Operation & Plugging
• Liability for Property Damage and/or Personal Injury caused by Operations, Fire or Blowout

king interests because of the lack of liability involved. The investors we work with are typically at or near retirement age, desire steady income but above all else want to preserve their hard earned wealth. Consequently, they turn to Royalty Interests over Working Interest. Albeit the reward is higher with the working interest – it is not enough to off set the risk. We are in the business of capital preservation.

The liabilities involved are multiple in a working interest but the five greatest we have discovered are:

• Liability of a Capital Call
• Liability to Governmental Authority Having Jurisdiction, Including Environmental Liability
• Liability for Costs of Exploration, Operation & Plugging
• Liability for Property Damage and/or Personal Injury caused by Operations, Fire or Blowout

. Albeit the reward is higher with the working interest – it is not enough to off set the risk. We are in the business of capital preservation.

The liabilities involved are multiple in a working interest but the five greatest we have discovered are:

• Liability of a Capital Call
• Liability to Governmental Authority Having Jurisdiction, Including Environmental Liability
• Liability for Costs of Exploration, Operation & Plugging
• Liability for Property Damage and/or Personal Injury caused by Operations, Fire or Blowout

f a Capital Call
• Liability to Governmental Authority Having Jurisdiction, Including Environmental Liability
• Liability for Costs of Exploration, Operation & Plugging
• Liability for Property Damage and/or Personal Injury caused by Operations, Fire or Blowout
• Liability for Subsurface Damage of Hydrocarbon Reservoirs Caused by Negligent or Intentional Operations

If I were selling real estate that I had owned for 20 or 30 years, had paid down the debt and was looking for a potential retirement vehicle to satisfy a 1031 exchange - then looking at the above bullets would make me very uncomfortable to say the least! Royalties have none of the above stipulated concerns. Royalty interests can have expected lives of anywhere from months to 40 years and beyond, though only those with a long expected life are appropriate for someone considering them a 1031 exchange. Energy investors have been enjoying the benefits of private royalty ownership and “like-kind” exchanges for over 60 years. Court Rulings dating back to the 1940’s have set the precedent and affirmed the opportunity for investors to accomplish tax deferral by exchanging between brick-and–mortar and royalty interest; both of which are forms of real estate.

Many investors are nearing retirement age. They continually seek above all capital preservation and a steady stream o