Mineral Rights

Are you one of the millions of mineral rights owners in the United States? If so you may have a stake in the complex world of oil and gas. The Oil and Gas Mineral Services Company provides you with educational articles and business advice for mineral and royalty owners. You can read more about the Oil and Gas Mineral Services Company on our About Us page. The paragraphs and links below will answer many common questions about your mineral rights. View the right side bar for additional articles covering a wide variety of topics. If you need further help contact us at info@mineralweb.com or call (713) 893-4476.

Mineral Rights and Surface Rights

Mineral rights can be described as unseen value associated with a tract of land. Historically, land was transferred among owners with the mineral rights remaining attached with the surface rights. As oil and gas production blossomed in the U.S., these rights began to be viewed independently. If mineral rights were severed, i.e. the process of separating mineral rights from the surface rights, a new and separate chain of title for the minerals begins.

Separate ownership of mineral rights and surface rights can sometimes cause confusion. With respect to oil and gas production, the owner of the surface rights has limited input as to whether oil or gas is produced from underneath his property. If production is established, a portion of the value is paid via a royalties fraction (or percentage) to the mineral rights owner.

Leasing Your Mineral Rights

If a landman comes knocking at your door, it's wise to know a few things before signing an oil and gas lease. Here are two articles that will help you negotiate your oil and gas lease. The first, Oil and Gas Leases: Top Ten Things Not to Do. describes some of the mistakes mineral rights owners make and how you can avoid them. The second article, Oil and Gas Leasing: Top Ten Things to Do illustrates how you can pursue the best deal for your mineral rights with regard to your lease bonus payment, royalty percentage, and other important lease provisions. Learn more about the process of oil and gas production in the article Oil and Gas Production in Nontechnical Language.

Mineral Rights Taxes

As with other assets you own, mineral rights come with a tax liability. These tax liabilities vary depending on whether the mineral rights are producing or not. Mineral rights are taxed both at the state and county level, in addition to your personal Federal tax obligation. The County Ad Valorem Tax is generally levied only on producing minerals. There are several ways to mitigate these taxes including the Depletion Allowance and 1031 Exchanges. The article Royalty Tax provides answers and links to common questions oil and gas royalty owners have about taxes relating to mineral rights.