Types of Mineral Ownership
When looking to sell your mineral rights, you may come across a few questions. For example, do you have surface rights or mineral rights? What is a non-participating royalty interest (NPRI)? Here at Momentum Minerals, we can help you determine what rights you own.
If you do not know your royalty interest or the type of mineral contract you possess, it can be difficult to determine what kind of rights you have and whether or not you have the authority to sell them. If you find yourself in this position, Momentum can help evaluate your legal rights and determine your ownership. To learn more, view our information below or contact us to request a more information.
Non-Participating Royalty Interest
If you have a non-participating royalty interest (NPRI), you may be wondering what entitlements and control you have over the mineral rights or production. Momentum will help you determine what type of interest you have and how that affects your control.
- What is an NPRI? A non-participating royalty interest owner has a right to all or a portion of the royalty from gross production, but does not have the right to execute a lease, receive a bonus or any delay rentals. An NPRI owner also does not have the right to produce the minerals by himself, and they are not responsible for the operational costs associated with production or drilling. An NPRI has fewer rights than a ‘regular’ mineral rights owner as they do not have the right to make decisions related to the execution of leases. Other mineral rights owners generally participate in at least one of the previously mentioned activities.
- Why assign an NPRI? There are several situations when creating or assigning an NPRI may be appropriate. One such example is allocating inheritance. NPRI’s can be assigned as inheritance so that the receiver benefits from a steady stream of income from the royalties, but does not have to deal with negotiations of leases or make decisions concerning the wells. An NPRI can also be helpful in negotiations during land transactions. A seller of the land may reserve the mineral rights but assign a portion of the royalties to the buyer by using a NPRI. This way, the buyer can also benefit from future production and drilling but not partake in decision making. Conversely, if the buyer of the land is also acquiring the mineral rights, he or she may assign an NPRI to the seller as additional compensation.
What is the Difference Between Surface Rights vs. Mineral Rights Ownership?
Momentum Minerals purchases both producing and non-producing mineral rights, receiving royalties and overriding royalties for oil & gas. We work with mineral rights owners, and it is important to understand the difference between owning the surface and owning the minerals.
- Surface Rights Owner- If you own the surface rights to an area of land, it does not necessarily mean you own the minerals below that land. In areas of the country where drilling or mining occurs, the ownership between the surface of the land and the minerals beneath it are often severed. As solely a surface rights owner, this means you have no royalty rights to the minerals that are extracted from beneath your land. However, depending on the state, there are laws to help protect surface owners and make them feel more comfortable with oil companies drilling on their land.
- Mineral Rights Owner- If you are solely a mineral rights owner, you earn the royalties that come from extracting the minerals from the land in question. You do not have control over what occurs on the surface. As the mineral rights owner, you can sell, mine or produce the gas or oil below the surface. When it comes time to drill, you also have a right to as much of the land surface as is reasonably necessary to access the minerals, but there are some states with laws that protect surface owners’ rights.
Negotiating with surface rights owners can be confusing and stressful. By selling your mineral rights to Momentum, you can benefit from immediate returns on your land. As experts in our field, we are eager to take on the risks and difficulties that can come with extracting minerals and negotiating with surface owners.
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Houston, TX 77024
Houston, TX 77024