Understanding the right to lease mineral property.
Get Your Free Mineral ValuationExecutive rights represent one of the most important—and often misunderstood—aspects of mineral ownership. Simply put, executive rights are the authority to negotiate and sign oil and gas leases.
Understanding whether you hold executive rights is crucial because it determines your control over if, when, and how your minerals are leased for development.
Mineral ownership is often described as a "bundle of rights" that can be separated:
The power to negotiate and execute oil and gas leases.
The right to receive lease bonus payments.
The right to receive delay rental payments during the primary term.
The right to receive royalties from production.
When all these rights are held together, you have "full" mineral ownership. When they're separated, complex ownership structures can result.
Executive rights commonly become separated through:
Deed Language: When minerals are conveyed "subject to" another party's right to lease
Surface Owner Retention: When surface owners sell minerals but keep leasing authority
Estate Planning: When wills or trusts distribute rights differently among heirs
Prior Transactions: Historical conveyances that separated these rights decades ago
Note: Many mineral owners don't realize their executive rights are severed until they try to lease their minerals and discover someone else holds that authority.
If you own minerals without executive rights:
Receive royalties from production
Sell your mineral interest
Transfer minerals to heirs
Receive your share of lease benefits
Negotiate lease terms
Choose the operator
Set the royalty rate
Control timing of leasing
Executive right holders aren't free to act however they please. In most states, they owe duties to non-executive owners:
The executive must consider the interests of non-executive owners when negotiating leases and cannot act solely for personal benefit.
The executive cannot take actions that would harm non-executive owners, such as accepting below-market terms or unfavorable lease provisions.
Get a free valuation and learn about your options—whether you hold executive rights or not.
Request Your Free ValuationExecutive rights are the authority to negotiate and sign oil and gas leases on mineral property. The executive right holder controls when, to whom, and on what terms the minerals are leased. This right can be held together with the minerals or severed and owned separately.
Yes, executive rights can be severed from mineral ownership. This often occurs when surface owners sell minerals but retain the right to negotiate leases, or when minerals are conveyed "subject to" someone else's leasing authority. The non-executive mineral owner still receives royalties but cannot negotiate lease terms.
Without executive rights, you cannot negotiate leases or receive bonus payments directly. The executive right holder negotiates on behalf of all mineral owners. You will still receive your proportional share of royalties from production, but you have no control over lease terms, timing, or operator selection.
Yes, you can sell non-executive mineral rights. Buyers understand these interests and price them accordingly. Non-executive minerals may be valued somewhat differently because the owner cannot control leasing, but they still represent valuable ownership in the underlying minerals and royalties.
In most states, the executive right holder owes a duty of utmost good faith and fair dealing to non-executive mineral owners. They must exercise reasonable care when negotiating leases and cannot act solely for their own benefit at the expense of other mineral owners.
Disclaimer: This information is for educational purposes only and should not be considered legal advice. Consult with a qualified attorney for specific questions about executive rights and your mineral ownership.