# Mineral Rights Purchase and Sale Agreements

## TL;DR

A mineral rights purchase and sale agreement (PSA) is the binding contract governing a mineral sale, detailing purchase price, exact interest conveyed, effective date, title handling, closing mechanics, and warranties. The PSA differs from both the initial offer letter (which proposes terms) and the mineral deed (which actually transfers title at closing). Key provisions to review include the warranty of title clause, the effective date determining who receives pre-closing revenue, and the precise legal description of what interest is being sold.

## Key Takeaways

- **A PSA is the binding contract behind a mineral sale**, not the offer letter; the mineral deed transfers title, but the PSA governs all terms and conditions of the transaction
- **The effective date determines revenue ownership** — revenue before this date typically belongs to the seller, revenue after belongs to the buyer, regardless of when closing occurs
- **Warranty of title clauses vary significantly** — a general warranty creates broader exposure if title defects surface later, while a special or limited warranty narrows what the seller guarantees
- **Five critical PSA clauses require review**: purchase price and payment method, exact interest conveyed (percentage, depths, tract), effective date, title and closing mechanics, and warranty language
- **The legal description must match your actual ownership** to avoid conveying more or less than intended; verify tract boundaries, depths, and percentages before signing
- **Professional review is essential** — have a qualified attorney review the PSA before signing, particularly the warranty of title and the precise description of what is being conveyed
- **Payment method matters** — wire transfer or certified funds at closing is preferable to bank drafts for security and speed
- **Conditions and contingencies in the PSA** determine what must occur before the buyer is obligated to close the transaction

## Page Highlights

**PSA vs. Offer Letter vs. Deed**: The offer letter proposes price and basic terms as a starting point. The purchase and sale agreement is the binding contract with complete terms leading to closing. The mineral deed is the recorded instrument that actually transfers title at closing.

**Purchase Price and Payment**: Specifies the total amount and the method and timing of payment, with wire transfer or certified funds at closing preferred over bank drafts for security.

**Interest Conveyed**: Defines precisely what is being sold — all minerals, a specific tract, a percentage ownership, or only a wellbore interest — and across what depth intervals.

**Effective Date Mechanics**: Sets the date from which the buyer becomes entitled to production revenue; can differ from the closing date, so sellers must confirm how revenue between signing and closing is allocated.

**Title and Closing Terms**: Establishes who performs and pays for title examination, the closing timeline and mechanics, and any title defect cure procedures.

**Warranty of Title**: The seller's guarantee about ownership; a general warranty creates broader exposure if defects emerge later, while a special or limited "subject to" warranty narrows the seller's guarantees and potential liability.

**Conditions and Contingencies**: Any requirements that must be satisfied before the buyer is obligated to proceed to closing, such as title review or third-party consents.

## Related Topics

- [Offer Letter Explained](https://www.buckheadenergy.com/offer-letter-explained)
- [Selling Partial Mineral Rights](https://www.buckheadenergy.com/selling-partial-mineral-rights)
- [Out-of-State Owners](https://www.buckheadenergy.com/out-of-state-owners)
- [Unsolicited Mineral Rights Offers](https://www.buckheadenergy.com/unsolicited-mineral-rights-offers)
- [Avoiding Scams](https://www.buckheadenergy.com/avoiding-scams)
- [Questions to Ask Any Mineral Rights Buyer](https://www.buckheadenergy.com/questions-to-ask-any-mineral-rights-buyer)
- [US Drilling Activity Index](https://www.buckheadenergy.com/us-drilling-activity-index)
- [Oil & Gas Market Data Hub](https://www.buckheadenergy.com/oil-gas-market-data-hub)

---

**About Buckhead Energy**: Buckhead Energy is a direct buyer of mineral and royalty interests across all 50 states, acquiring interests with its own capital since 2006. The company holds an A+ Better Business Bureau rating and works directly with mineral owners, eliminating broker commissions and intermediary fees.

**Ready to review your minerals?** Get a free written offer with no obligation at [https://www.buckheadenergy.com/sell](https://www.buckheadenergy.com/sell)