What Are Mineral Rights?

What Are Mineral Rights?

This term seems to be most often related to oil and gas mineral extraction but it really covers any raw material that would or could be extracted from below the surface including oil and gas, ores, metals, gold, silver, etc.

Depending on what part of the country you currently own land or are looking to invest in land, a close look at the short term and long term potential in that particular area can produce multiple ways that a landowner can benefit or profit from the resources in the ground.

These minerals give the landowner the right to sell or profit from the extraction in several different ways as well. They can be sold outright, they can be leased, they can be developed for production, and they also can be sold in any of those ways on a percentage basis. That term is usually considered a “royalty” income and is based on a negotiated percentage in some type of contractual lease or production agreement.

Here in the central parts of Kansas at this time there is really only a strong interest in oil and gas mineral rights. Many energy companies are looking to invest in these areas based on geological studies. With the process of seismographs these companies can determine the validity of the prospective basin in which they will be exploring.

For the landowner, the importance falls in the process of educating themselves with the standards as each state is regulated differently with varying laws. In Kansas and most recently on the Mississippian lime play that has grown drastically in the last year, mineral rights are at a premium and have been sold, leased, and traded on rampant pace. There are numerous publications that can be a source of information for any landowner looking to determine their properties “mineral rights” potential.