How to Lease Mineral Rights

Millions of Americans own mineral rights in the United States.  As a group, mineral owners make up one of the largest deposits of private wealth in the nation.  Caddo is in the business of purchasing mineral rights and royalty interest, but also strives to help and educate mineral owners on the assets they own. Feel free to contact us with any questions regarding mineral ownership.

 

Mineral Rights vs. Royalties

Mineral rights are the rights of ownership of the minerals below the surface of the earth. The owner has the right to capture the minerals and/or delegate the capture rights to another party to recover minerals by signing a lease agreement.

Royalties are revenues received from the production of oil and gas.

Surface Rights vs. Mineral Rights

Surface rights can be, and in many cases are, separate from mineral rights. Surface rights pertain to ownership to the surface property and any buildings or developments above the surface.

Lease Agreements

Lease agreements are made between the mineral rights owner and an operating company. The agreement gives the operator the right to produce oil and gas from the property. The amount of the royalty is established in the lease.

Pooling and Unitization

Oil and gas have the ability to move through the rocks underground, so a well drilled on property could drain the oil and gas from underneath a neighboring property. Due to this, some states have regulated the fair allocation of oil and gas through the concept of pooling and unitization. Unitization leads to the sharing of royalties from the oil and gas produced within a specified area.