Mineral and Royalty Interests

Owning land can have a lot of different joys, like having the space to watch the children play in the shade of the trees or even room to expand and start new construction projects. Of course, there could also be treasure buried under all that land. It comes in the form of minerals, oil, and gas. There are companies, like Endeavor Acquisitions, that will assist in determining the best options when considering monetizing the mineral supplies. There are a few things to know, however, before leaping into the fray.

Mineral Rights

Although a person may own the land on the surface, the minerals under that land may already belong to someone else. This odd clash of ownership happens because mineral rights, also known as mineral interest, and property ownership are not always tied together. In fact, the person that owns the mineral estate under the surface property has the right to use a reasonable amount of the surface above the minerals when extracting them. An example of this would be the land that oil wells sit on when removing the liquid mineral from the ground. The owner of the mineral and royalty interests of the oil would be entitled to that portion of land required to house the well. The complexities involved in knowing who owns each estate is another reason that outside sources should be consulted before taking the plunge into this world of black gold.

Royalties

Another intricate system, royalties are how a mineral owner will receive their investment. Companies that are interested in obtaining the mineral, whether it is oil, gas, or other desirable minerals, will excavate it, transport it, and put it through a manufacturing process that turns it into a usable form. The exact amount of royalties are based on a predetermined value, but the monetary gain will typically factor in the cost of the company in transportation and manufacturing, and the company’s profit margin for that particular product. These royalty interests can be sold with the mineral estate, but there is a lot involved going into that process. A professional with expertise in this field should be consulted first.

Regardless, mineral rights and property owners have a lot to gain. Precious minerals can be hidden away underground without anyone knowing, but investing in having the property evaluated could lead to substantial royalty interests. Owners of mineral estates and the property owners will need to find their way through the complexities of ownership and, with the help of an expert, begin extracting those minerals!

About Reva B. Williams