Leasing Of Mineral Rights – A Brief Article

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Leasing of Mineral Rights – a brief

In return for the lease agreement, the owner gets the bonus amount and the royalty. Both of these quanta can vary widely, depending upon the property owner’s negotiation and the conditions prevailing in the local market.

Author: Anirban

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Only the US and a few other countries support the concept of surface and mineral rights. Owing to these rights, it’s now possible for property owners to sell the surface property and its mineral rights separately. However, oil companies do not generally buy mineral rights since they are unsure of the minerals that lie under the surface of the property. Consequently, companies generally opt for a lease agreement with the owner and acquire company mineral rights on lease for a fixed period of time, which can be extended later. Such mineral rights grant the company the right to drill, mine and extract minerals in accordance with the terms of the lease agreement.

The lease agreement is a legal document, which defines the conditions of the temporary grant of company mineral rights. Oil and gas companies undertake surveys throughout the US in order to find mineral rights to a property most likely to yield minerals. In this connection, it must be clarified that the term ‘minerals’ has now come to cover metals, their ores, non metals like gypsum and fossil fuels which include oil, gas, coal, peat and shale. Even stone, sand, gravel and marl are deemed to be minerals. It would, therefore, be in the interest of the property owner to sign the lease agreement granting the company mineral rights to his land only with respect to certain minerals. The owner should seek the services of a local oil and gas attorney prior to signing the lease agreement.

In return for the lease agreement, the owner gets the bonus amount and the royalty. Both of these quanta can vary widely, depending upon the property owner’s negotiation skills and principally, on the conditions prevailing in the local market. The owner stands to gain most on the royalty, which is a percentage of the production amount. The most important factor in a mineral rights leasing agreement is the contract, upon which explorations and excavations are based.

About Author

http://www.royaltypurchaser.com specializes in purchasing of oil and gas royalties, and company mineral rights from estates and individuals. Also, buys oil lease royalties in return of cash from parties in Texas, Oklahoma, Mineral rights New York, Louisiana, West Virginia, New Mexico, Michigan, California, Illinois, Montana, Canada and many other North American locations.

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Leasing of Mineral Rights – a brief