Frequently Asked Questions
We Can Tell You Everything About Minerals and Royalties
Owner FAQ's
General FAQ's
Top FAQ's
01. Mineral Rights Value
Are mineral rights worth anything?
How are mineral rights valued?
Is there a mineral rights value calculator?
What is the average price per acre for mineral rights?
Is there a mineral rights value rule of thumb?
How much are mineral rights worth in Texas?
Are mineral rights worth anything?
Maybe, maybe not. There are times when you want to sell your minerals and when you should hold them. Speaking to a seasoned oil and gas professional that understands minerals and royalties and that is also familiar with the area in which your interests reside is a great place to start asking questions to see whether selling or holding is the right option for your particular situation.
How are mineral rights valued?
The value of mineral rights varies due to a lot of factors. In addition to economic, political, geopolitical events, pay zones, Operator activity, etc. mineral values also fluctuate based on what stage of production they are in. Sometimes they may be worth a lot or they might need to be held onto for a while longer. Contact a professional to decide if a mineral appraisal is right for you.
Is there a mineral rights value calculator?
Yes, in the form of a Certified Petroleum or Reservoir Engineer. The only true and legitimate way to find out the true mineral rights value of your assets is to: a) have an appraisal done by a licensed CPE, or b) see what mineral buyers are willing to pay. As we always say, “Something is only worth what someone is willing to pay.” It is not recommended to take your assets out to market on your own and without buyer representation so contact a professional to help.
What is the average price per acre for mineral rights?
Pick a number between 0 and 50,000, get a dart board, and throw a dart. Average prices per acre vary significantly depending on many, many factors, such as the quality and productivity of the pay zones and rock (for example, the Permian Basin has multiple pay zones making it highly attractive), the price of oil and gas, supply/demand, stages of development, and so much more.
Is there a mineral rights value rule of thumb?
Yes, but most of them out there are not even close to being accurate. Your best bet is to do some research or get a mineral appraisal done. There are so many variables that go into calculating mineral rights value with the advancements in fracking technology that production results can vary substantially making those old rules of thumb unworthy of consideration.
How much are mineral rights worth in Texas?
Depends on where they are, what’s underneath the ground, buyer desirability and metrics, production potential, etc. Values will also vary based on the shale the interests are located in. For example, the Permian Basin is unique in that it contains several rock strata’s (Spraberry, Wolfcamp, Wolfcamp A-D, etc.) that have been able to create large quantities of oil and gas. Talk to a trusted oil and gas professional that knows the area your interests are located in.
02. Mineral Rights Appraisal
Do I need a mineral appraisal?
How do you come up with a mineral price?
What information do you need to create an appraisal?
How can I use the information from my appraisal?
How much does a mineral appraisal cost?
How long does it take to get a mineral appraisal done?
Do I need a mineral appraisal?
If you inherited minerals, absolutely yes!
If you have owned your minerals for quite some time, it’s a good idea to talk to an oil and gas company who does appraisals to see if one is right for you. Values change over time so they may be worth more (or less) than when you first acquired them. There are two types of mineral appraisals – current and retrospective.
How do you come up with a mineral price?
Determining the value of mineral rights is done by a Certified Professional Petroleum or Reservoir Engineer requiring large amounts of information to be collected, calculated, and analyzed including, but not limited to, past and recent public sales and production data, past and future potential development activity, the price of oil and/or natural gas, etc.
What information do you need to create an appraisal?
It depends on the type of appraisal – current or retrospective; however, both types need the following fundamental information to find out exactly what you own and what your interest ownership is which can be found through: 1) a copy of the lease, 2) division orders, and 3) revenue statements (#2 and #3 will only be available if the minerals are producing).
Supplying these documents can be the most troublesome part of the process if owners don’t have them. For example, if the owner does not have a copy of the lease, a title search will need to be done to try and find a copy of their lease royalty rate (if it’s recorded in the county public records and not just a Memorandum of Lease), acreage ownership details, etc. adding more time (and money) to the mineral appraisal costs. It’s best to gather as much documentation as you can before speaking to an oil and gas professional.
How can I use the information from my appraisal?
Most importantly, with the mineral values from your oil and gas appraisal, you can minimize your tax implications, use it for estate planning if you want to put them into a trust, and in some cases, a banking institution could accept the appraisal as collateral if you wanted to borrow against it. Additionally, the cost of the appraisal is also a tax deduction, or write off.
How much does a mineral appraisal cost?
Generating a mineral appraisal can be a very labor intensive process. Many factors that affect the cost of a mineral appraisal include, but are not limited to, the number of properties or assets you have, the number of wells affecting your acreage, how far back we have to research, etc. so they can range anywhere from $6,000-$15,000 or more. Find out how much your appraisal could be.
How long does it take to get a mineral appraisal done?
Venergy can provide a comprehensive mineral appraisal done by our Certified Petroleum Engineer within 3-4 weeks.
03. Inheriting Mineral Rights
Can mineral rights be inherited or willed?
I just found out that I own mineral rights but I have no idea what they are or what to do next.
I've inherited some mineral rights, what do I need to do?
Can mineral rights be inherited or willed?
Yes, mineral rights can be inherited or willed to other individuals or entities. An oil and gas attorney can help you with the paperwork. When passing down, or conveying, mineral and/or royalty rights to heirs, there are a few things you must know.
I just found out that I own mineral rights but I have no idea what they are or what to do next.
The first thing you should do is start to learn the basics about minerals and royalties. The second thing you should do is contact a reputable and trustworthy Landman that is familiar with the area your assets are located in and offers mineral appraisal services. Venergy Momentum offers complimentary consultations and mineral appraisal services for all US properties and is 5-star Google rated with an A+ Better Business Bureau rating.
I've inherited some mineral rights, what do I need to do?
Whether you knew you inherited mineral and/or royalty rights (or were surprised to find out you did!), you need to know exactly what you own, where the interests are located, and what the mineral and royalty interest value is. If you have inherited minerals and/or royalties, they are subject to being taxed as ordinary income. You could save, or lose, thousands if you don’t know their value at the time of inheritance. Speaking to an oil and gas professional that does mineral appraisals is the first step to take after inheriting minerals and royalties. Watch this short video on what to do if you have inherited minerals and/or royalties.
04. Selling Mineral Rights
Should I keep my mineral rights?
Why should I sell my mineral rights?
When should you sell mineral rights?
Keeping mineral rights when selling property. What do I need to know?
What is the going rate for mineral rights?
Where to sell mineral rights?
What is a mineral rights auction?
What is a mineral rights Purchase and Sale Agreement (PSA)?
Should I keep my mineral rights?
They are worth selling if you want to improve your life situation (i.e. get out of debt, pay for a new house, college, start a business, etc.). Remember, these are assets and should be treated as such. It makes much more financial sense to sell your interests if they are worth something and you can improve your situation.
The best news is that you don’t have to sell all of your mineral rights! You can easily keep some and sell some to give you the boost you need. There are definitely times when it is advantageous to sell. We can help you determine how valuable your assets are with a complimentary consultation.
Conversely, if you don’t need the money and there is nothing going in the areas they are located, then don’t do anything. Don’t sell your minerals when they are not worth anything!
Why should I sell my mineral rights?
You should consider selling your mineral rights to meet the needs in your life including, financial (i.e. build your dream home, pay off debt, or pay for college), entrepreneurial (i.e. real estate, 1031 Exchange, open a business), life transitions (i.e. trust and will planning, forced separate of estate or divorce), charitable (sell or donate them to your favorite organization or religious institution), if you simply don’t want to deal with the paperwork associated with owning them, or for any reason at all. We explain more in this blog.
When should you sell mineral rights?
You should sell mineral rights when they are worth a lot of money!
Unfortunately, many mineral owners believe all minerals are valuable, but that is not the case. Aside from the times when you should sell your minerals, other times to sell are when you want to take the lump sum payout and move it into another investment opportunity, pay down debt, pay for college, open a business, etc.
Newly inherited owners may have been told the old adage, “Never sell your minerals…” but that is no longer good advice. If you need or want the money because of personal or family situations and it is the right thing to do for you, then look into selling your minerals. Best news yet? You don’t have to sell all of them! You can keep a percentage and sell some.
Keeping mineral rights when selling property. What do I need to know?
If you are a surface and mineral owner and want to keep your mineral rights when selling your surface property, you can reserve or convey your mineral rights interest (as a percentage or fraction) in a conveyance document such as a Deed or Assignment. Any rights that you do not reserve (i.e. Mineral, Royalty, and Executive Rights) will automatically pass onto the next owner. As long as you ensure everything is defined in the conveyance, all should be fine. A really good Landman or oil and gas attorney can help you with drafting conveyance documents.
What is the going rate for mineral rights?
Where to sell mineral rights?
Selling mineral rights can become a frustrating process if you do not know what to expect or don’t know where to start. The best place to start is: 1) Work with a professional who knows the ins and outs of buying and selling minerals and royalties and has a trusted buyer network. Some brokers fit this category, some do not, so do your research carefully. The next (but not highly recommended) option is: 2) Work with a mineral rights auction house to see what mineral buyers will offer you. Watch this video to learn more about how auction houses work. The least recommended option is: 3) Go at it alone, but only go this route if you have adequate knowledge of the industry, have a trusted buyer network, and know exactly what your property is worth (not what you think it’s worth).
What is a mineral rights auction?
A mineral rights auction is an online auction where sellers can advertise and promote their assets to buyers. Just like other auctions, buyers have a predetermined amount of time (typically 30 days) to put in their bid before the bid window closes. Once the window is closed and an offer is accepted, the auction house will broker the transaction and take a percentage of the sale (anywhere from 3-10%). Be aware that properties don’t always go to the highest bidder for various reasons at auctions. If you choose to go this route, work with an auction house that only allows trusted and experienced buyers to be a part of their network. Watch this short video to learn more about auction houses.
What is a mineral rights Purchase and Sale Agreement (PSA)?
A PSA is a legally binding agreement that defines the terms and governs the buy/sell transaction where the buyer agrees to buy at certain terms and a seller agrees to sell at certain terms. There are many different forms of PSA’s; some are longer than others, all offer different protections. As a mineral owner, you want to make sure you have a legitimate PSA that outlines all of the terms. An oil and gas attorney is necessary to review any and all acceptable offers to purchase. A PSA can also be known as Mineral Purchase Agreement or Royalty Purchase Agreement.
05. Buying Mineral Rights
Why should I buy mineral rights?
Who buys mineral rights?
When should you buy mineral rights?
Where can I buy mineral rights?
What is the going rate for mineral rights?
Why should I buy mineral rights?
Buying minerals and royalties could be a great investment as long as you know how to manage them. They can be sold and/or purchased via a 1031 Exchange to defer taxes from the purchase or sale of other real property. Once you buy them you own them in perpetuity until you decide to do something else with them.
Who buys mineral rights?
There are many individuals, institutions, and companies that buy mineral rights, you just need to know which ones are legitimate buyers. If you are new to the industry, you don’t want to get caught up with any “get rich quick” schemes or work with anyone who promises you the highest offers without verified client reviews and testimonials.
When should you buy mineral rights?
You should NOT buy mineral rights at the same time when it is best to sell them. You typically want to buy minerals and royalties when prices are down and there is not much development happening. Selling mineral rights at these times is when they are most valuable due to their location and stage of production. There are also many other factors that come into play when buying and selling minerals.
Where can I buy mineral rights?
Mineral rights can be bought from mineral rights auctions or done the old school way by contacting a good Landman who knows the area, can help you research, and make lots of phone calls. Just like any investor, buyers need to know what they are doing and getting into before talking to companies that buy mineral rights.
What is the going rate for mineral rights?
Owner FAQ's
01. Mineral Rights & Land Ownership
Do I own mineral rights on my land?
Who owns mineral rights on my property?
Are mineral rights considered real estate?
Can you own mineral rights without owning the land?
Are mineral rights real or personal property?
What do I need to know about mineral rights when buying land?
Do I own mineral rights on my land?
The best way to find out if you own mineral rights on your land is to read your conveyance documents or deed. Look for language like, “Subject to prior mineral and royalty reservations….”. If there is “subject to” language, engage an oil and gas landman to help you run title to find out exactly what you own.
If you are receiving monthly royalties then you own some of the royalty rights and quite possibly the mineral rights. (Understand the difference between mineral rights and royalty rights here.)
If someone is contacting you about leasing, then you own mineral rights and it could also be a sign you own the royalty rights as well.
Who owns mineral rights on my property?
To find out who owns the mineral and/or royalty rights on your property, a title search, or running title, will be necessary. Be aware most US states are mineral dominant meaning the surface owner is subject to the rights of the mineral owner. In plain terms, this means the subsurface mineral owner can use the surface owner’s land to extract the minerals beneath it. Owning the mineral estate carries with it superior attributes, or rights, over the surface estate which is why it is known as the “dominant estate”.
Are mineral rights considered real estate?
Yes! Mineral rights, as well as royalty rights, are considered real estate and can be treated as such. A highly popular and smart way to defer taxes when buying and selling minerals and royalties is to consider a 1031 Exchange.
Can you own mineral rights without owning the land?
Yes, you can own the mineral rights, as well as royalty rights, without owning the surface of the land. This is called a severed mineral interest. Since they are severed, they are treated as two separate pieces of property where the severed mineral rights can be transferred by themselves.
Are mineral rights real or personal property?
Mineral rights are real property. Real property refers to land and anything growing on, and attached to the land, including buildings. They differ from personal property in that personal property is property that is not attached to the land (i.e. vehicles, household items, valuables, and clothing).
What do I need to know about mineral rights when buying land?
Before making a land purchase, especially rural property, you need to know if the mineral rights, as well as any royalty rights, are part of the sale because if you don’t own them, then someone else does. Be aware the mineral owner can sign an oil and gas lease without the surface owner’s knowledge giving an Operator the right to put a well on the surface owner’s property. This is especially true for Texas and many other states because it is a mineral dominant state meaning a surface owner cannot keep a mineral owner from producing their own minerals. Read more about real estate and mineral rights.
02. Transferring (Conveying) Mineral Rights
What does mineral rights convey mean?
How are mineral rights transferred?
What does mineral rights convey mean?
A mineral rights conveyance is the legal process of transferring certain property or interests from one person to another, or Grantor to Grantee. During the conveyance of the property, oftentimes the person transferring the property, the Grantor, will reserve mineral rights and/or royalty rights, attached to the property being conveyed.
How are mineral rights transferred?
Transferring mineral rights is the same thing as a conveyance whereby the Grantor, the person conveying the rights, draws up a deed that explains what is being sold or transferred to the Grantee, the person receiving the interests. It should also explain what is being reserved, or withheld, from the sale. Learn more about how to transfer and divide up mineral and royalty interests.
03. Reserving & Severing Mineral Rights
What does it mean if my mineral rights were severed?
What does mineral rights reserved mean?
Can mineral rights be reserved by the Seller?
What does it mean if my mineral rights were severed?
If you own the surface rights to a piece of land it does not necessarily mean you own the minerals or royalties below that land. In areas of the US where drilling or mining occurs, the ownership between the surface of the land and the minerals beneath it are often different due to the minerals and/or royalties being severed from the surface estate. As a surface rights owner, this means you have no rights to the minerals, and quite possibly the royalty rights, that might be produced from beneath your land. Only the subsurface mineral owner has the right to sign and negotiate a lease to drill a well, provided that mineral owner also owns the Executive Rights.
What does mineral rights reserved mean?
Reserving mineral rights occurs when a mineral owner reserves, through a royalty percentage or fraction (i.e. 12.5% or 1/8) of what is produced and sold from the land for themselves. Reserving mineral and/or royalty rights occurs when a person conveys, transfers, or sells minerals and/or royalties to another person or entity, or when an oil and gas lease is signed between an oil and gas company, the Lessee, and the mineral owner, the Lessor, for a specific time frame, or “term”.
Can mineral rights be reserved by the Seller?
Absolutely. Sellers can, and oftentimes do, reserve for themselves any amount of the mineral or royalty rights they wish when transferring or selling. It is expressed as a percentage or fraction, typically anywhere between 12.5%-50%-75% of their rights. Mineral rights must be reserved at the time of conveyance. If they are not expressly reserved, then all rights will automatically be passed through to the next owner. Read this blog about reserving mineral and royalty rights.
04. Leasing Mineral Rights
What is a mineral rights lease?
How do I find out mineral rights lease rates?
What is an average oil lease price per acre?
What is a mineral rights lease?
In Texas, an oil and gas lease is a conveyance by the mineral owner, the Lessor, to the oil and gas company, the Lessee, of the mineral estate for a specific time frame, or “term”, and thereby the oil company grants to the mineral owner, or the mineral owner reserves for themselves, through a specific royalty rate or percentage, from what is produced and sold from the land.
How do I find out mineral rights lease rates?
To get started on finding mineral rights lease rates, get on public forums and ask questions. It’s also a great idea to call people that own neighboring acreage and see what information they can provide to you. Unfortunately, there is not a specific website or database that reveals lease rates for an area since values can fluctuate rapidly and significantly from one property and from one Operator to the next. Your best bet is to find a trusted, professional Landman who knows the area well that can give you guidance. Read our tips when it comes to negotiating with mineral buying companies and this blog on how to find out if the offers you are receiving are good.
What is an average oil lease price per acre?
The average oil lease price per acre varies, and can vary quite substantially. In recent years, it has been anywhere from $50 per acre to $20,000 per acre or more. Oil lease price per acre depends on many factors including location, Operator desirability, geologic production potential, and so much more.
05. Claim Unclaimed Oil, Gas, and Mineral Royalties
I got a letter in the mail wanting to buy my minerals and royalties that I didn't know I owned. What's going on?
I got a letter in the mail wanting to buy my minerals and royalties that I didn't know I owned. What's going on?
If you are receiving letters in the mail or are getting phone calls from parties interested in buying your minerals and/or royalties, then somewhere down the line you had a family member that owned mineral rights and they died without a will which subsequently led to you inheriting them!
First, don’t let them rush you into anything. You have time to wrap your head around things. The first thing you need to do is contact a professional landman to help you find out what you own, where it is located, and what the value might be, and whether or not they might be producing which would lead to having money sitting and accruing in what is called a suspense account. Next step is to get a mineral appraisal which can help get a lot of these questions answered for you. It is also absolutely necessary to have them appraised at the time of inheritance because inherited mineral rights are taxable. Watch this short video to learn more about what to do if you are being contacted by buyers.
06. Mineral Rights Taxes
How are mineral rights taxed?
Are inherited mineral rights taxable?
Where to report mineral rights income?
How are mineral rights taxed?
If you are receiving monthly royalties that means your minerals are “producing”, meaning they’re going to be taxed as ordinary income when you file a tax return, and just like property taxes, at the county level as well. If your minerals are not producing then no taxes will apply since you are not receiving any monthly revenue. However, note that if a mineral owner sells his mineral rights, they will be taxed on the sale of the minerals.
Are inherited mineral rights taxable?
Yes! Inherited mineral rights are subject to capital gains taxes when you decide to sell your inherited mineral rights. It’s imperative to receive a baseline value of inherited mineral rights with a mineral appraisal. The federal long-term capital gains tax is 15-20%, however some states have their own capital gains tax rate in addition to the federal capital gains tax.
Take this simple example: You inherited minerals and royalties at some point in the past and let’s say they were worth $500k at the time of inheritance. A few years later, you sell them for $1MM. If you didn’t get a mineral and/or royalty appraisal at the time of inheritance, or a Retrospective Mineral and/or Royalty Appraisal dated back to the time of inheritance, prior to selling those interests so you would be taxed the 15-20% capital gains tax on the full $1MM. Have no fear though, you can still have a Retrospective Mineral and/or Royalty Appraisal completed after the rights are sold.
If you would have done an oil and gas appraisal, and as long as you owned the assets for longer than one year (long-term capital gains), you would only be liable for the 15-20% capital gains taxes on the $500k profit ($75k @ 15%) instead of the full $1mm ($150k @ 15%). Big difference!
Where to report mineral rights income?
Mineral rights income is reported under Royalties when filing taxes. The oil and gas Operator will send the mineral owner a 1099-MISC form with this amount, as well as send a copy to the IRS and to your state taxing authority (if applicable).
07. Mineral Rights & 1031 Exchange
If I own mineral rights can I do a 1031 Exchange?
What is the process of a 1031 Exchange? How long does it take?
If I own mineral rights can I do a 1031 Exchange?
Absolutely! In fact, it’s a smart move as it can be a way to defer your taxes. A 1031 Exchange allows the owner to sell a property and purchase another “like-kind” property of equal or greater value using the proceeds from the initial sale without paying taxes immediately. These taxes are deferred until the future sale of the replacement property. Mineral and royalty interests qualify for a Section 1031 Exchange opportunity as they are considered a “like-kind” exchange. Learn more here.
What is the process of a 1031 Exchange? How long does it take?
Before a 1031 Exchange is initiated, the Exchangor is responsible for marketing his property, securing a buyer and executing a Purchase and Sale Agreement (PSA). The Exchangor’s obligation (the PSA) to sell the Relinquished property is then assigned to a1031 Exchange Intermediary. The 1031 Intermediary transfers the Relinquished property to the buyer. The 1031 Intermediary then receives the money from the buyer for the Relinquished property.
Within 45 days of the relinquished property transfer, the exchangor must identify a replacement property to acquire. The exchangor negotiates the purchase terms for the replacement property with the seller and executes a PSA. The exchangor’s obligation (the PSA) to buy the replacement property is then assigned, or transferred, to the 1031 intermediary. The assignment allows the 1031 exchange intermediary to use the exchange proceeds to purchase the replacement property.
The 1031 intermediary is mandated by IRC 1031 to transfer the replacement property to the exchangor within 180 days of the relinquished property transfer.
General FAQ's
01. Mineral Rights Explained
What are mineral rights?
What does it mean if you have mineral rights?
Why are mineral rights important?
Are mineral rights tangible or intangible?
How do mineral rights work?
Do mineral rights expire?
Where do mineral rights start?
What are mineral rights?
Mineral rights, or mineral interests, are the rights to search for, develop, and produce minerals and hydrocarbons such as oil and gas from land. Mineral rights are sometimes confused with royalty rights and differ greatly from surface and executive rights. We cover all there is to know about mineral and royalty rights in this blog.
What does it mean if you have mineral rights?
Having mineral rights means having the right to search for, develop, and produce oil and gas and other minerals from the interests you own. Owning mineral interests can also entitle the owner to receive monthly royalties from oil and gas drilling activities (i.e. production).
Why are mineral rights important?
Owning mineral rights allows you the potential to receive significant monetary payouts. Owning the Executive Rights of your interests is an added bonus because it gives the mineral owner the right to negotiate an oil, gas, and mineral lease.
Are mineral rights tangible or intangible?
Mineral rights are both tangible and intangible. They are intangible in that you can’t physically touch minerals since they are only a contractual component where the mineral owner gives the right to an Operator to access the minerals to create a tangible product (i.e. oil and gas) which then creates another tangible product in the form of money as monthly royalties.
How do mineral rights work?
Mineral rights are considered real estate – this is the best way to try to understand how they work initially. Like surface property rights, mineral rights are acquired, transferred, gifted, inherited, leased, or sold on a contractual basis to a relative, heir, a mineral buying company, an oil and gas Operator, or anyone else willing to purchase them. They can even be exchanged for other like property for significant tax deferrals.
Mineral rights are different than surface rights, royalty rights, and working interest. Learn all about them here.
When a mineral owner’s interests begin to produce oil and gas, the monthly royalties they receive are subject to taxation. Non-producing minerals do not incur taxes.
Do mineral rights expire?
Mineral rights do not expire unless there is a term attached to them. Term mineral interests are given to someone for a specific time period (i.e. 5, 10, 20 years) or “for as long as they are producing”. After the term period expires, they can be reverted back to their original owner (or to anyone else). Typically, if they are producing they will remain with the current owner, their heirs, and/or assignee unless it is specifically stated otherwise in the document at the time of conveyance.
Where do mineral rights start?
It varies from state to state but mineral rights pertaining to hydrocarbons can potentially start within 6 inches from the surface. There are other kinds of minerals but they don’t count as hydrocarbons.
02. Net Mineral Acre & Net Royalty Acre
What is a mineral acre?
What is a net royalty acre?
What is a mineral acre?
Referred to as a Net Mineral Acre, or NMA, it is a representation of the net acreage owned by a mineral owner from under the gross acres of a particular parcel or tract of land. For example: If the gross acres of a tract of land are 40 gross acres and you are stated to own half of the minerals in that particular tract of land, then your net mineral acres owned are equal to 20 net mineral acres. Learn more about the differences between Net Mineral Acre and Net Royalty Acre and how to calculate them.
What is a net royalty acre?
A Net Royalty Acre, or NRA, is similar but different to that of a Net Mineral Acre. A Net Royalty Acre is a net mineral acre that is subject to an oil, gas, and mineral lease with a certain royalty percentage granted and provided for within that lease. It becomes a NRA once a mineral interest has been leased, otherwise it remains a net mineral acre (NMA). Net royalty acre is the most common term used today for mineral buyers so it is very important to understand how to calculate net royalty acres.
03. Mineral Deed & Transfer Forms
What is a mineral rights deed?
What is a mineral rights transfer form?
What is a royalty deed?
What is a quit claim deed? Does it transfer mineral rights?
What is a mineral rights deed?
A mineral rights deed is a legally binding document a mineral owner uses to convey a mineral interest, in the form of a percentage or fraction, to someone else. A mineral rights deed can also be used to sever minerals from the surface estate. The Grantor may also include in the deed their retained rights (i.e. Surface rights, Executive rights). A mineral deed is different than a royalty deed.
What is a mineral rights transfer form?
A mineral rights transfer form is a document used to convey or transfer mineral and/or royalty rights to another person or entity. Deeds, general warranty deeds and assignments are types of mineral transfer forms.
What is a royalty deed?
A Royalty Deed transfers all, or a a portion, of the royalty rights from oil or gas production from one person or entity to another. It does not transfer mineral rights; only the right to receive royalties if/when the minerals are produced.
What is a quit claim deed? Does it transfer mineral rights?
A Quit Claim Deed is a type of deed a Grantor, the seller, uses to transfer any and all rights, whatever owned by the Grantor to a Grantee, the buyer, without any kind of warranty, transfers any and all rights “as is”. Unlike a general warranty deed which offers the most protection for a Grantee, a Quit Claim Deed provides the least amount of protection.
A Quit Claim Deed states what the Grantee is buying with the understanding that there is no verification, promise, or guarantee through covenants of title, that the Grantor owns what they say they own. Quit Claim Deeds are typically used for low-risk transactions and between family members.
It is called a Quit Claim Deed because the Grantor “quits”, or releases, the rights they have to the property described to the Grantee. Quit Claim Deeds should only be used with trusted and verified Grantors. They can also simply be used to clear up any title issues such as misspellings or documents missing a signature.
04. Mineral Rights Title
What is a mineral rights title search?
Where can I do a mineral rights title search?
A mineral rights title search can be done online through the county courthouse website or at the county courthouse.
What is a mineral rights title search?
A mineral rights title search is also known as “running title” and is a mandatory process done by an oil and gas professionals when buying and selling minerals and royalties. Running title is an act of performing due diligence to discover and confirm mineral ownership by researching chains of title (or in lay terms, who owned what, where and when and who did it get passed down, or transferred to). To research recent history, running title can be partially done online although in most cases, a trip to the county courthouse is required to research earlier chains of title. There are a lot of aspects of running title that cannot be completed online and need to be completed by a professional Landman. Venergy can help.
Where can I do a mineral rights title search?
A mineral rights title search can be done online through the county courthouse website or at the county courthouse.
A mineral rights title search can be done online through the county courthouse website or at the county courthouse.
Performing a mineral rights title search is necessary in order for the mineral owner to know exactly what they own. If you don’t own 100% of the rights, it’s beneficial to find out who owns the rest in the event you might want to try to purchase their rights.
05. Recording Mineral Rights
Are mineral rights public record?
Is there a mineral rights database?
Are mineral rights public record?
Yes, with enough searching you can find out deeds of record. If the minerals are producing, the county appraisal district will be able to show who owns the mineral rights in that area but full title must be ran to find out the exact ownership. Be aware that counties operate and record information differently.
Is there a mineral rights database?
There is not a public mineral rights database per se, but there are paid subscriptions available that pull in data from multiple sources to give you an idea of what someone owns. A popular (yet very expensive) database that provides this is Drilling Info.