Everything You Need to Know to Get Started
Just discovered you own mineral rights? This guide explains the basics in plain English—no industry jargon required.
Mineral rights are ownership of the resources below the ground—oil, natural gas, coal, and other minerals.
In the United States, land ownership can be split between the surface (the dirt, grass, buildings) and the minerals underneath. You might own one, the other, or both.
Think of it like owning an apartment in a building. Someone can own the unit above you, and someone else owns the unit below. With land, the "unit below" is the minerals.
Surface Rights: The land itself—you can build on it, farm it, live on it
Mineral Rights: What's underneath—oil, gas, minerals. Can be drilled and produced
In most countries, the government owns all minerals. The U.S. is unique in allowing private mineral ownership—which is why there's a whole industry around buying and selling them.
The most common way. A relative who owned minerals passed them to you in their will or through intestate succession. You might have inherited without even knowing it.
If you buy land and the minerals haven't been "severed" (separated), you automatically own both. But in many areas, minerals were severed decades ago.
Some people buy minerals as investments, separate from any land. This is what mineral buyers like Buckhead Energy do.
Your actual ownership amount. If you own 50% of 100 acres of minerals, you have 50 NMA. This is how minerals are measured and valued.
The percentage of production income paid to mineral owners when oil/gas is extracted. Typically 12.5% to 25%. You don't pay for drilling—you just receive your share of revenue.
An agreement allowing an oil company to drill on your minerals. You keep ownership but grant drilling rights. In exchange, you receive a bonus payment upfront and royalties if production occurs.
The company that actually drills and operates wells. They send you royalty checks if there's production. Examples: EOG, Pioneer, Devon, Chevron.
A document from the operator confirming your ownership percentage and payment details. You sign this to start receiving royalty checks.
You own the minerals AND have the right to lease them. This is the most valuable type of ownership. You can sign leases, receive bonus payments, and receive royalties.
You receive royalty payments but can't sign leases. Someone else controls leasing decisions. You just receive your share of production revenue when wells produce.
A carved-out royalty. You receive a set fraction of production, but have no say in leasing. Often created when minerals are sold but the seller retains some royalty.
Ownership that includes costs. You pay your share of drilling and operating expenses, then receive your share of revenue. Higher risk, higher potential reward. Most individual mineral owners don't have this.
If your minerals are leased and producing, you receive monthly royalty checks. If not currently producing, you can wait for drilling activity in your area. This is passive—you don't have to do anything.
If unleased, you can sign a lease with an oil company. You receive a bonus payment upfront (per acre) and will receive royalties if they drill and find production. The lease grants drilling rights for a set term.
Receive a lump sum now instead of ongoing royalties. This converts uncertain future income into certain present cash. Many owners sell to simplify their finances, fund retirement, or eliminate management hassle.
Transfer minerals to children or other family members during your lifetime or through your estate. Estate planning is important—minerals can become complicated when divided among many heirs.
Wells are actively producing oil/gas
You receive royalty checks (monthly or quarterly)
Higher value—proven production
Easier to value based on cash flow
No current production
No royalty income yet
Value depends on future drilling potential
May be leased (bonus income) or unleased
Both have value. Non-producing minerals in an active drilling area may be worth significant amounts. Producing minerals provide immediate income. The right choice depends on your situation.
Find your deed or inheritance documents
Identify the county and legal description
Determine your ownership percentage
Check if there's an existing lease
Are there producing wells? (check royalty checks)
Is there active drilling in the area?
When does any existing lease expire?
Who is the operator? (contact for questions)
If you're not sure what you own or what it's worth, mineral buyers like Buckhead Energy can research your minerals and provide free valuations. You're under no obligation—it's just information to help you understand your assets.
You don't need to live near your minerals to own them. Millions of Americans own minerals in states they've never visited. You can hold them and receive royalty checks by mail, or sell them if you prefer. Everything can be done remotely—you don't need to travel to the mineral location.
Generally no. Unlike real estate, minerals don't have property taxes in most states (though some states tax mineral value). You don't pay for drilling, operations, or maintenance—that's the operator's responsibility. You just receive royalties when there's production. The only cost is income tax on any royalties you receive.
It varies enormously. Minerals in a hot drilling area like the Permian Basin might be worth $10,000-$50,000+ per net mineral acre. Minerals in less active areas might be worth $500-$2,000 per acre. Non-producing minerals are typically worth less than producing ones. The only way to know is to get a valuation based on your specific property.
You can, but it's not ideal. If you're receiving royalty checks, you're receiving taxable income that needs to be reported. If someone is trying to lease or buy your minerals, ignoring them means missing out on money. Some states have "dormant mineral" laws that can affect unused minerals. At minimum, keep your address updated with any operators so payments and important documents reach you.
Get a free, no-obligation mineral valuation
Buckhead Energy provides complimentary research and valuations for mineral owners. Understand what you have and what it's worth—with no pressure to sell.
Disclaimer: This information is provided for educational purposes only and does not constitute legal, tax, or financial advice. Consult with qualified professionals for advice specific to your situation.