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Thursday, February 25, 2021

MineralWare brings modern mineral management to Frost Bank

MineralWare

Fort Worth Club Tower

777 Taylor St.

Penthouse II-G

Fort Worth 76102

817-735-8195

www.mineralware.com

Fort Worth technology startup MineralWare received a significant endorsement on Sept. 15 when a subsidiary of Cullen/Frost Bankers Inc. announced plans to roll out the company’s software to its mineral accounts clients.

San Antonio-based Frost Bank is one of the 50 largest banks, by asset size, in the United States, and its Frost Wealth Advisors group’s mineral asset management department is one of the largest in the country, managing more than 700 mineral accounts across 25 states.

“What MineralWare provides to Frost is a fully integrated mineral management platform,” said Ryan Vinson, CEO and co-founder of MineralWare.

The software is owned by 5M’s Minerals Management LLC, though the company is rebranding itself as MineralWare.

MineralWare, founded in 2013, offers a software platform to make managing minerals and royalties less complex and more lucrative for the owners. There are estimated to be about 12 million mineral owners in the U.S., so MineralWare has a big market potential. The company’s software combines land mapping data, geographic information system (GIS) data, well data, accounting and check stubs, analytics, alerts and reporting into one online platform.

MineralWare works with banks, institutions, investment funds, foundations, family offices and individuals, but Frost Bank is now the first large bank to use the software. A variety of individual mineral owners, funds, and family offices own minerals and have to manage them in conjunction with production companies and manage interests, leases and wells.

Through MineralWare, customers and the property managers of Frost Wealth Advisors will have the tools to manage minerals in an easier, more time-sensitive and cost-sensitive manner.

“MineralWare is really about the only thing out there that manages minerals in a logical and efficient manner,” Frost Bank Trust Officer Debbie Dorsett said.

“There are other software programs out there but they don’t tie the mapping of the land side with storing, also with the keypunch stroke the deed or the leases or division order or revenue,” she continued. “There are programs that do variations of things, and there are programs that are more powerful on the technical side of oil and gas, but this is truly like a mineral manager.”

Dorsett said there are two interesting things about MineralWare: mineral managers at the bank can get quick access to needed information, and customers have the same access, giving them transparency and comfort.

Frost Bank is shifting accounts to MineralWare and hopes to give customers usernames and passwords by spring. The bank has already shown the software to some customers and potential clients, and has chosen the top 100 accounts to start the software with. At this time, Dorsett says, there will be no cost to customers who have user accounts. Typically, MineralWare fees can be as low as $100 per month and mineral management fees are charged at an hourly rate,

Dorsett says there are a couple of reasons Frost Bank decided to upgrade the way it has managed minerals in the past.

“One of the main reasons is that there is a lot of paperwork involved,” she said. “When those files are actually at your fingertips, when they come up into the program and they’re there for you to access just at a keystroke, then it becomes a really powerful tool.”

Further, Dorsett said, bank customers and mineral management clients are becoming younger and more computer-efficient and want to be able to access these documents at a moment’s notice.

THE COMPANY

5M’s Minerals Management’s name came from the phrase “managing minerals means more money.”

“As the company started to grow, we realized the real value in our company is our software coupled with our world-class customer service,” CEO Ryan Vinson said.

Vinson has an industry background as an in-house landman prior to starting MineralWare and the former head of oil and gas advisory services at Bessemer Trust. He was first exposed to the oil and gas and mineral industry growing up in Midland, where he was the fourth generation in the business.

Vinson saw how his family managed their assets, though as a child he didn’t understand the extent of their portfolios.

He said that as he watched and learned from them he saw “a lot of bad deals, a lot of bad leases that were signed, negotiated deals that … they really treated it like ‘mailbox money.’” The checks would come in the mail and would be cashed but there wasn’t any mineral management really taking place.

After receiving a degree from Texas Tech University in energy commerce, he worked as a landman for oil and gas companies before eventually moving over to the mineral and royalty side of the fence.

“As you look across banks and other institutions,” Vinson said, how they managed their mineral royalties “was highly labor intensive and highly inefficient.”

In some places the process is still this way, he says. Someone goes to the filing cabinet and pulls oil and gas documents from property folders and then, he says, if you’re lucky you’ll have an Excel spreadsheet with notes on clients, and then a team will hand-key all the line items for check stubs.

“Here I am using about seven different sources to manage our clients’ assets … so that made things pretty scary,” Vinson said. “What I did was look at all the software platforms and what I found was that most of them were built for the oil and gas companies, not for the actual individuals and companies who own these mineral and royalty interests.”

After he decided that there had to be a better way to manage these assets, Vinson attended the Texas Christian University Royalty Owner Program, which teaches mineral and royalty owners and institutions how to manage their assets over a 3-day management practices program. At the event, Vinson met John Baum, founder of the program. Baum is also a founder and principal in CER Energy Institute, a firm that provides training programs to royalty and mineral owners.

Baum and Vinson decided to team up and create 5M’s Minerals Management.

“The first thing we did is start to create the software to help us manage clients,” Vinson said. MineralWare’s client base is a mix of individuals, foundations, companies, institutions and others.

“The beauty behind [MineralWare] is it integrates all these different sources of data into one platform and it puts it into an easy-to-use interface that helps you easily uncover these valuable insights that are kind of hidden within your portfolios,” he continued.

MineralWare’s software does the heavy lifting for the client, Vinson said, so the client is left with just the key data, which is easily accessible at the client’s fingertips.

“Here in Fort Worth there are a lot of mineral and royalty owners, and most of them are in the dark about what’s happening with their check and what’s going on,” he said. “They were in the dark before and now they can really take control and they’ve got the software to understand what’s happening.”

MineralWare has a tech team that came together to create and program the software, but Vinson says the company as a whole contributed to creating the product.

“The company that we have built would not be successful if it wasn’t for the people we have around it,” Vinson said. “The credit for our success goes to our [12-member] team … the team as a whole has made this company successful and the team we have is going to make this company even more successful.”

“It’s a rewarding feeling to be able to help individuals and companies when there was no prior help before,” Vinson said.

MineralWare now works with over 800 accounts in just about every state that has oil and gas production. In addition to letting mineral and royalty owners better manage their investments and payouts, the software also identifies any wells on the client’s property that are producing but not being paid on.

Vinson says there can be thousands of reasons payments are suspended and this can be especially common if a client’s interests are spread across multiple counties.

“Oil companies are using the suspense money to fund their operations in a lot of cases, so it’s not in their best interest to come locate you, nor do they have the administrative staff to do that,” Vinson said. “So that duty kind of falls on the mineral owner and, without software, like before MineralWare, that is very difficult to uncover.”

One of MineralWare’s clients – Permian Basin Area Foundation – recently found over $100,000 in suspended funds through the use of the company’s software.

THE CLIENTS

The Permian Basin Area Foundation is a community foundation established in 1989 that makes charitable grants and owns oil and gas interests in more than 20 counties in West Texas. It had been self-managing its minerals and outsourcing its revenue accounting. But in an effort to make management processes more efficient and data-driven, it began looking for another way to do things.

After seeing a software demonstration, the foundation began working with MineralWare. After about three months, the foundation retrieved more than $100,000 in suspended funds.

“Their approach is very much mineral-owner centric as opposed to operator-centric,” foundation CEO Guy McCrary said. “Even though it’s a relatively new relationship, we’ve been very impressed and I would gladly recommend them to other mineral owners, especially passive oil and gas mineral owners.”

McCrary says there are two aspects he thinks sets MineralWare apart from other software currently available.

“One, again, it’s very mineral-owner sensitive. It’s not really driven by operations,” he said. “It certainly is streamlined from the paper-pushing processes we’ve historically used and it just makes it significantly more expeditious and accurate.”

“One of the other dimensions MineralWare has brought to us is the ability to identify where we are not receiving royalty where we should be receiving royalty,” McCrary said.

As it has recovered the suspended funds, McCrary said, the foundation has increased its capacity to make grants.

“I think they’ve got an edge at this point from the mineral owners’ perspective, and they have aspirations to continue to improve that platform, and I like the sound of that,” McCrary said.

THE NEED

MineralWare’s software is going to have a huge impact on the mineral management industry, says Ken Morgan, professor and director of the Texas Christian University Energy Institute.

“Lots of people and businesses are in need of simple-to-use software like MineralWare,” Morgan said. “As the word gets out, it will be a big success by professionals and everyday personal users.”

Morgan added that the industry has long needed user-friendly software that can both track and report mineral interests. He has found that minerals and mineral wealth management are important to many Texans and says, “This product is spot-on to help people and businesses do a better job keeping track of their mineral interests.”

“I have seen it and actually used it. Works great and anyone can understand and use this software,” he said, adding that other companies could be working to develop competing software. “If I know anything, it’s that a good product does not go unnoticed. I suspect the word is already out on the streets and competitors will be out soon talking about their products.”

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