HomeBusinessA Guide to Mineral Ownership 

A Guide to Mineral Ownership 

If you find minerals beneath the land you own, which means you are fortunate enough to receive royalty income and get mineral ownership. Mineral Ownership refers to the legal rights to explore, extract, and receive the profit from the minerals discovered beneath the land. This in-depth article will help you comprehend every facet of mineral ownership, including the difference between surface and mineral ownership. 

Whether you are currently a mineral rights holder, looking to lease mineral rights, or an investor considering investing in minerals, understanding every aspect of mineral ownership may help you make educated choices. Property ownership is not always necessary to have mineral rights. So, what exactly mineral ownership is?  

Introduction to Mineral Ownership 

In the USA, mineral ownership differs from land ownership, which gives the owner the right to use the land surface. There are three primary mineral estate types:

  • Unified estate: Surface and mineral rights coexist.
  • Severed/split estate: Separated mineral and surface ownership.
  • Fractional ownership: Multiple owners hold a portion of the mineral site.

Owners of mineral rights may negotiate development leases with companies in return for royalties and other benefits.

However, when you decide to buy land in Texas, you may not directly get the possession of mineral rights that belong to the land. Identifying whether such minerals are associated with land or not may be a challenging task, especially if you are new in the mineral industry or unaware of the mineral laws. 

If you purchase the land in Texas, you are eligible for mineral ownership and surface ownership or both. You must know both ownerships are more distinct than one another. If you discover the mineral reserves beneath the land you possess, you cannot directly assert minerals in it. You must undergo every legal aspect to obtain the ownership of those minerals. 

The following are three major considerations you should contemplate to 

The following are three major considerations you should contemplate to understand mineral ownership. 

1.Legal Description:  

These legal descriptions are generally shown in titles and deeds. They are represented in a standard format to detect the exact boundaries and location of mineral land. It may consist of the following factors:  

  • A detailed survey with a specific plat or map. 
  • Bounds and Metes (Property lines description in written format) 
  • Block number and Lot number within the registered subdivision. 

Encompassing the legal description is an essential step, as mineral rights can be diverged from surface rights and owned by other entities. A detailed “Legal Description” clears out the mineral possession, preventing any misunderstandings or potential arguments.   

If you are expecting the ownership of minerals in a Lone Star State, it is preferable to consult with an attorney or authorities with expertise in oil and gas law. These authorities can assist you in comprehending your legal descriptions, underlining the mineral complications, and ensuring your mineral interests are secured. 

2.Net Mineral Acres 

The next aspect is Net Mineral Acres (NMA). It refers to the specific part of land you own having minerals in it. You need to calculate NMA in order to get the maximum share of royalty. It is calculated using the following formula: 

NMA = GROSS ACREAGE * MINERAL INTEREST PERCENTAGE 

Here, Gross Acreage indicates the whole land surface you possess. 

Let’s assume you own 400 acres of land with a mineral interest of 50%. In this case, you are eligible for 200 NMA’s. (i.e. 400 acres * 0.5). 

NMA is an essential aspect that helps calculate your share of royalties from the extraction of minerals. 

3.Ownership Type 

It is the most important aspect of understanding mineral ownership. The Lone Star state offers distinct ownerships especially for single land: mineral ownership and surface ownership. You need to understand which type of ownership you are eligible for. Mineral ownership refers to the possession of minerals beneath the land, whereas surface ownership offers only the possession of the surface. When you receive surface ownership, you can utilize all the surface, but you are not permitted to utilize minerals beneath the land.  

To access the minerals, you must have mineral ownership. In some cases, if you only have mineral ownership for a particular surface, you can access the mineral beneath it, but you are not allowed to utilize that surface. 

To avail yourself of both surface and minerals, you must have mineral ownership and surface ownership for a single piece of land. There are also subtypes of mineral ownership.     

Types of Mineral Ownership 

Mineral ownership gives you access to utilize all the minerals beneath the land. It is crucial to understand the types of mineral ownership to a mineral right holder, as it may directly influence his rights and economic interests in the property. 

Types of mineral ownership help determine whether the surface owner has legal permission to lease the minerals, get royalty amount and bear the extraction expenses. 

Without a clear understanding or detailed information, the mineral owner may lose his mineral rights or fail to exploit positive revenue generated from mineral production. 

To receive accurate royalty payments and keep the mineral ownership longer, mineral holders must understand the below-mentioned types of mineral ownership interests.

  • Mineral Interest: 

It is the interest generated from mineral production, such as oil and gas, after the disposal of a lease or deed.   

  • Royalty Interest: 

This interest arises when you lease your mineral rights. Being a mineral owner, if you enter into a leasing contract with another entity, you can ask for your royalty interest.  

  • Working Interest: 

This interest occurs from leasing and encompasses all the undertakings that belong to drilling, development, exploration, and property operation.  

  • Overriding Royalty Interest: 

It is unlike other types of ownership. It does not permit the possession of any substance beneath the land. Instead, it offers the possession of a part of the revenue generated from mineral production.  

If you get mineral ownership, you must also understand all the above types of mineral interest. It also helps you comprehend how much legal access to minerals you have and ensure how many royalty payments you are eligible for. 

Final Thoughts

Mineral Ownership refers to having the possession of minerals beneath the land of the owner. Knowing the complexities of understanding mineral ownership in Texas requires a detailed interpretation of several official, technical, practical, and legal aspects. Being a mineral owner, you should ensure explicit legal descriptions of your deeds to identify the divergence between mineral and surface ownership; each stage is essential to secure your mineral rights. 

Utilizing comprehensive tools like Mineral View, you can identify oil companies, operators, and mineral owners in your county and city, as well as get the latest facts and relevant information on the mineral industry.  

You can now access the up-to-date Mineral Rolls Data, Well Data, and Production Data in a single click. By navigating these details, you ensure that your mineral ownership is secured and fully optimized. 

MineralView.com is where you can access any mineral data and ownership details you require in the USA.   

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