Frequently Asked Questions

Account Changes

This section deals with changes to your account.

Current Compass Accounts

How do I change from paper check to direct deposit (ACH)?

In addition to receiving access to your cash faster with ACH - direct deposit, the risks of identity theft drops significantly.  You still receive access to your statements online. 

 

To convert from paper check to ACH you need to simply click the link to the form.

Go to the “Forms” tab to download the direct deposit form and email the completed form to investorrelations@compassroyaltymanagement.com, or fax to 866-853-9204.

You will need to attach a copy of a voided check and return to CRM.

 

Direct Deposit (ACH) conversion form

How do I notify Compass Royalty Management of a change in my address?

Go to the “Forms” tab to download the change of address form and email the completed form to investorrelations@compassroyaltymanagement.com, or fax to 866-853-9204.

Change of Address Form

 

How long will it take to set up my direct deposit once I enroll online and submit the required forms?

As long as the form is in house by the 15th of the month, barring no issues, it should be processed and effective within that same month. If received after that time, it will be processed and effective with the following month’s distribution.

How do I notify Compass Royalty Management of a change in Trustee?

You will need to submit a signed letter of instruction.

If the Tax ID# is also changing, you will need to submit a form W-9.

 

If the Trustee is changing due to death, you will need to submit a copy of the death certificate as well.

 

You can either email investorrelations@compassroyaltymanagement.com or fax the documents to 866-853-9204.

 

If you have any questions, please call the IR toll free number at 1-877-769-1121.  

In some instances, we will require additional documentation.

What is a W-9 form and where can I find one?

The W-9 is used to submit your tax or social security number used for IRS reporting purposes.

 

Go to the “Forms” tab to download the form and email the completed form to investorrelations@compassroyaltymanagement.com or fax it to 866-853-9204.

 

W-9 Form

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877-769-1121

Owner Relations

Ownership Changes

Frequently asked questions on moving your account to another brokerage firm or change of your financial adviser.

What to do when life events require changes to your royalty investment?

What should I do when the owner of record passes away?

If your investment is in an Access Fund, go to the “Forms” tab and download the Change of Ownership form for the Access Funds. You will also need to submit a copy of the death certificate.

 

If the investment is held in the person’s individual name, you will need to submit a copy of the Probated Will and any Letters Testamentary. If the Will was not probated, you will need to submit an Affidavit of Heirship.

 

Please email investorrelations@compassroyaltymanagement.com or fax to 866-853-9204. If you have any questions, please call the IR toll free number at 1-877-769-1121.  

In some cases, there may be additional documentation required.

 

If your investment is in a Direct Title property, go to the “Forms” tab and download the Change of Ownership form for the Direct Title properties. You will also need to submit a copy of the death certificate.

 

If the investment is held in the person’s individual name, you will need to submit a copy of the Probated Will and any Letters Testamentary. If the Will was not probated, then you will need to submit an Affidavit of Heirship.

 

Please email investorrelations@compassroyaltymanagement.com or fax to 866-853-9204. If you have any questions, please call the IR toll free number at 1-877-769-1121.

In some cases, there may be Re-titling fees and/or additional documentation required.

How do I change my name in CRM records in the event of a marriage or divorce?

You will need to send in either your marriage certificate or divorce decree. Please email investorrelations@compassroyaltymanagement.com or fax it to us at 866-853-9204.

How do I change ownership to someone else or to an entity, such as a Trust or LLC?

  • If your investment is in an Access Fund, go to the “Forms” tab and download the Change of Ownership form for the Access Funds. You will also need to submit a copy of the Trust documents or LLC formation documents, wherever applicable. Please email investorrelations@compassroyaltymanagement.com or fax to 866-853-9204. If you have any questions, please call the O.R. toll free number at 1-877-769-1121. In some cases, there may be additional documentation required.

 

  • If your investment is in a Direct Title property, go to the “Forms” tab and download the Change of Ownership form for the Direct Title properties. You will also need to submit a copy of the Trust documents or LLC formation documents where applicable. Please email investorrelations@compassroyaltymanagement.com or fax to 866-853-9204. If you have any questions, please call the O.R. toll free number at 1-877-769-1121. In some cases, there may be Re-titling fees and/or additional documentation required.

I would like to add my spouse to my account. How do I do this?

Go to the “Forms” tab to download the appropriate forms. Please email us at investorrelations@compassroyaltymanagement.com or fax to 866-853-9204. Any questions, please call the O.R. toll free number at 1-877-769-1121; there may be additional documentation required.

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Investor Mailing

This section deals with letters you may have received from outside firms on your royalties.

How to deal with documents received on behalf of your investment

I received a Division Order, what do I do?

A Division Order (D.O.) is an instrument, which sets forth the proportional ownership in produced hydrocarbons, including crude oil, natural gas, and NGL’s. Sometimes the D.O. is referred to as a division of interest. A mineral rights owner through the mail generally receives a D.O. within 3 to 4 months after well completion.  If you receive a D.O., fax or email a copy of the mailing to Investor Relations, then set it aside.  D.O.s are sent to investors by various oil and gas payors usually because the payor is not aware, as reflected in the conveyance documents, that CRM has the right to receive revenues on the investor’s behalf. CRM has authority under the conveyance documents to correspond with the payor and work to have remitter records updated to reflect CRM as the recipient of remitted funds/revenue.

I received a Notice of Hearing - what do I do with it?

Most Notices of Hearing are informational in nature, and oil and gas producers will at times propose actions with respect to your mineral interests that require approval from the agency which governs oil and gas production for that particular state. 

 

For example, in Oklahoma the agency is the Oklahoma Corporation Commission, while in Texas it is the Texas Railroad Commission.  Most, if not all, oil and gas producing states have these regulatory agencies.  When a producer seeks permission from the applicable agency for some action, notice of the proceeding must be sent to all who own a mineral interest under the affected lands, as shown by the record title in the County Clerk’s office for that county. 

 

The actions for which the producer seeks approval are almost always favorable to you as a mineral owner.  Some examples are: Increased Density (the producer is proposing a new well), Pooling (the producer is proposing to combine all mineral interests under a given piece of land for the purpose of drilling a well), and Spacing (the producer is seeking a definition and description of the acreage from which a given well will likely produce). 

 

If you receive a pleading from a regulatory commission, or receive a document which you cannot readily identify, please contact Investor Relations in the manner described above.

I received a check from an Operator, what do I do with it?

Fax or email a copy of the mailing to Investor Relations, then set it aside.  Please provide your name and contact information.  We will contact you to let you know the next step to take. 

I received a letter from Oklahoma Registry, what do I do?

Although the mailing from the OK Mineral Owner Registry looks very formal and similar to a state document, it is indeed a solicitation and can be disregarded.  Your Direct Title ownership will remain in place until such time as you or one of your successors files legal conveyances transferring that ownership.

I received an offer to buy my investment, is it a good deal?

These offers, mailed out by the thousands every month, are sent to the mineral owners of record in a given county in an effort to convince the mineral owner to sell their interest(s) in certain acreage, certain wells, or in some cases, everything the mineral owner owns in the county. 

These offers are very often accompanied by a “Draft” reciting the dollar amount offered for the purchase of your interest(s). These companies rely on the presence of this draft to convince the owner to sell their interest(s). However, most often, the offered price is a minimal amount and does not reflect the true value of your interest(s).

Additionally, as stated in your Participation Agreement and/or Subscription Documents, the interests you purchased are for investment purposes, and as such should be retained in order to realize the full rate of return on your investment.

As stated above, you may contact Investor Relations regarding any offers received or you may wish simply to ignore the correspondence.

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Taxes

This section deals with questions concerning taxes on your royalties.

Questions about taxes

How do I receive copies of K-1's and 1099's?

DIRECT TITLE INVESTMENTS - 1099s will be mailed via USPS on or before the deadline of January 31 of the year following the tax year.

 

ACCESS FUND LPs - K1s will be issued via USPS on or before the deadline of March 15 of the year following the tax year.

 

Contact investorrelations@compassroyaltymanagement.com if you need additional copies.  There is a nominal charge for additional copies.

When are K-1s and 1099s sent out?

With the deployment of the new Owner Website - tax documents will be available online ONLY on or before the date due.  Historical tax documents will be available as well.

 

1099's are sent on or before the last day of January annually

 

K1's are sent on or before March 15th annually.

 

Does Compass Royalty Management offer tax advice?

CRM cannot provide tax advice.  Any questions about taxes on your investment or royalty asset should be directed to your tax advisor or CPA. 

Does Compass Royalty Management pay state taxes?

CRM pays applicable Ad Valorem/Property taxes on behalf of the investor or partnerships managed by Compass Royalty Management. 

 

In addition, CRM makes the necessary tax deductions from your revenue and remits the tax in your name to those states which have non-resident State Income Tax withholding laws.  

What is an Ad Valorem Tax?

Ad Valorem tax, is a county level tax imposed on minerals in some states is assessed annually.

 

CRM typically makes monthly deductions from the funds for the estimated ad valorem taxes that are due at year end.  

 

Your individual deduction is indicated on the monthly Statement under the Taxes Column. 

What is a Severance / Production Tax?

A severance tax is imposed on the removal of nonrenewable resources such as crude oil, condensate and natural gas, coal bed methane and carbon dioxide. The severance tax is charged to producers, or anyone with a working or royalty interest, in oil or gas operations in the imposing states.

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General Oil & Gas Royalty

Basic Information

What should I do if I don’t receive my royalty check?

Contact Investor Relations at 866-853-9204


Checks are mailed on or around the last day of the month and can take up to 10 business days to arrive depending on your location.

When are royalty checks mailed each month?

On or around the last day of the month.

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Liquidation

Questions about liquidity

Does Compass Royalty Management Provide Valuations?

CRM does not provide valuations of your assets.  We are not professional appraisers and accordingly cannot provide a fair market value of the fund’s interests upon which you could rely for tax or estate valuation purposes. 

 

As indicated in Treas. Regs. 1.611-2(d) and (e), the determination of fair market value of a mineral interest for federal tax purposes requires the evaluation of numerous factors. An evaluation of these factors generally requires the services of a qualified professional appraiser with access to substantial amounts of market data. 

 

There are, however, analytical methods that can be used for reaching a logical estimate of the value of a mineral interest that may be helpful to you. A commonly used method for estimating value of a mineral interest is the reserve-based method. Under this method, an estimate of the current value of a royalty interest is based on the value of the remaining reserves in the mineral property discounted to present value.

 

The reserves for the properties are identified at the end of each year in a third party reserve report prepared by Netherland, Sewell & Associates, Inc. ("NSAI”), a copy of which can be purchased for a $50 fee. The NSAI report is conducted utilizing SEC rules for the purpose of determining oil, gas, and other product volumes on which the cost depletion calculation is based.

 

The reserve report is not a "market value appraisal" and relies on many parameters and assumptions as reported in the NSAI letter, which may not be representative of current market conditions. The reserve report indicates the remaining estimated proved, probable and possible reserves in the properties, and an estimated value can then be calculated using a present value discount rate of 10%.

 

This result, multiplied by the % interest in the royalty interests owned by the investor, could provide a reserve method value for the royalty interest.  Since interests in our funds are not frequently traded, it is difficult to provide a comparative valuation. 

How do I sell my interest?

Whether you are the direct title owner or a shareholder of your mineral rights, there are third party companies, which transact royalty assets.  Some are auction style, both online or live. 

 

There are also investment firms that buy minerals for the monthly cash-flow.  For direct title owners, there are fees for re-titling your minerals rights.  These fees can be very expensive if the property has interests spanning a large number or counties across several states. 

 

If interested in pursuing the sale of your asset and you would like contact information for the companies who transact these types of assets, please contact us. 

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