What Are Oil and Gas Mineral Rights
You own your property. Or do you really? In the majority of countries in the world, any mineral resources that are below or on the surface of the ground belong to the government. This includes any type of oil and gas mineral rights or valuable rocks. For these countries it is illegal for an individual or country to extract and sell any of these commodities without first obtaining permission from the government.
There are a few countries, including the United States, in which the ownership of these resources was originally given to the organizations or individuals who owned the surface of the land. Owners of these properties had both mineral rights and surface rights. This complete type of private ownership is called a “fee simple estate.”
Not only does the property owner have oil and gas mineral rights subsurface, but they also control the surface itself and the air above it. Owners can choose to do whatever they wish with it, including bequests, gifts, leasing, or selling to others. One real estate parcel may have several companies or people who have partial rights to it.
Transferring of oil and gas mineral rights from one person to another has different laws for each state. If you are considering buying or selling property that has oil and gas mineral rights, it will be in your best interest to contact an attorney who specializes in property rights.
Mineral Rights vs. Surface Rights
“I’ll pay you $1,000,000 for the oil and gas mineral rights to what is found beneath your property!” This sort of transaction has occurred many times. Since the owner doesn’t have the ability or interest to produce the oil, gas, or minerals that lie beneath his property, an oil or gas company will pay the owner for the privilege. The property owner can sell the resources that are underneath the surface without selling the land itself. The transaction can include the mining of a specific commodity only, or it may include all unknown or known resources which lie below the surface.
When it comes to oil and gas mineral rights, it is more common to simply lease them rather than sell them outright. When the lessee is unsure how much lies beneath the surface, often a signing bonus will be given to the property owner. This gives the lessee the opportunity to explore the property and look for significant quantities of gas or oil.
At the end of the lease period, if the oil and gas mineral rights lease not been extended for a longer time period, or a new one has not been written, all rights return back to the property owner. They can lease again to another company if they wish, or forget about underground exploration altogether.