CALIFORNIA MINERAL OWNERS GUIDE
The practical realities of owning Texas minerals when you live 2,000 miles away.
Texas is America's largest oil producer, and mineral rights there can be valuable. But when you live in California and your minerals are in the Permian Basin, managing them presents real challenges.
Consider what managing Texas minerals from California actually involves:
Royalty statements arrive from operators you've never heard of. They include well names like "Wolfcamp A Unit 1H" and decimal interest calculations to six decimal places. Understanding whether you're being paid correctly requires expertise you likely don't have.
When a new well is drilled, you receive a division order requiring signature. You need to verify the ownership interest shown is correct—a task that requires understanding Texas title records. Sign and return, or risk having royalties suspended.
If your minerals become unleased, landmen may contact you about signing a new lease. What's a fair bonus? What royalty rate should you negotiate? What lease terms matter? Making these decisions requires knowledge of local market conditions.
Texas has no state income tax, which sounds simple. But you'll owe federal taxes on royalties, and California taxes all income regardless of source. Tracking depletion allowances, keeping records, and filing correctly adds work.
From Los Angeles to the Permian Basin is over 1,000 miles. From San Francisco, it's closer to 1,500. This distance means:
You've likely never seen the property
You don't know the local operators or their reputations
Visiting to investigate issues isn't practical
Local expertise is hard to access
Time zone differences complicate communication
Many California residents own small fractional interests in Texas—perhaps inheriting 1/32 of their grandmother's 40 net mineral acres, now split among multiple cousins. The math:
Net mineral acres: 1.25
Monthly royalty (if producing): $50-200
Time spent on paperwork: 1-2 hours/month
Hourly "wage" for your effort: Maybe $25-100/hour
For small interests, the administrative burden often outweighs the financial benefit—especially when you factor in California's high income tax rates.
Given these realities, it's not surprising that many California residents decide to sell their Texas minerals. Common reasons include:
Simplification: Convert complex, distant assets to simple cash
Certainty: Lock in value now rather than uncertain future royalties
Time value: Redeploy proceeds in California real estate or other investments
Estate planning: Don't pass complexity to children
Immediate needs: Fund college, pay off mortgage, boost retirement
Some owners choose to actively manage their Texas minerals. This works best when:
The interest is large enough to justify the effort
You're comfortable with oil and gas concepts
You have (or hire) expertise to monitor operations
You believe future drilling will significantly increase value
You want to pass minerals to heirs who will continue ownership
But for many California owners with moderate interests and limited oil industry knowledge, selling is the more practical choice.
Not sure whether to hold or sell your Texas minerals? We provide free valuations that help you understand what your minerals are worth today. This gives you real data for making an informed decision—with no obligation to sell.
Get a free valuation to understand your options. No obligation, no travel required.
Get Your Free ValuationCalifornia Residents: Sell Your Texas Mineral Rights
Disclaimer: This information is for educational purposes only and should not be considered legal, tax, or financial advice. Consult with qualified professionals for specific questions about your situation.