One property can contain several different rights.
Real property may include both a surface estate and a mineral estate. Those estates can be owned together or separately, and the mineral estate may be divided among many owners over time through deeds, reservations, inheritance and trust distributions.
That is why ownership cannot always be determined from a street address or surface tax record. The recorded chain of title and the exact wording of the applicable instruments usually control.
Mineral interest
An ownership interest in the oil, gas and other minerals beneath a tract. Depending on prior conveyances, it may include the right to lease, receive bonus payments and collect royalties.
Royalty interest
A right to receive a share of production or revenue, generally without bearing drilling and operating costs. The document creating the royalty controls its scope.
Surface interest
Ownership of the land at the surface. A surface deed does not necessarily include all—or any—of the underlying minerals.
Overriding royalty
A royalty carved from a leasehold interest. It is commonly tied to a particular lease and may terminate when that lease ends.
Rights can be separated from one another.
Gross mineral acres describe the total acreage in a tract. Net mineral acres describe the owner’s proportional mineral ownership in that tract. Recorded deeds, reservations, probate records and other title instruments generally establish that ownership; division orders, unit information and royalty decimals can help evaluate it but may not tell the complete story by themselves.
The mineral estate is sometimes described as a bundle of rights. A mineral owner may hold the right to develop, lease, receive bonus consideration, receive delay rentals and receive royalty. Prior documents may have transferred or reserved some of those rights while leaving others in place.
For example, one person may own a nonparticipating royalty but have no right to negotiate a lease. Another may hold the executive right to lease while sharing royalty revenue with other owners.
Documents worth locating
- Recorded mineral or royalty deeds
- Deeds containing mineral reservations or exceptions
- Oil and gas leases and memoranda
- Probate orders, wills and affidavits of heirship
- Trust instruments or trustee certificates
- Division orders and recent operator statements
If you receive royalty payments, begin with your most recent check detail and division order. They may identify the operator, lease, unit, well, county and decimal interest needed to start organizing the property.
Begin with the document you have. A single deed, lease, statement or unit name may provide the first reliable link in the ownership chain.
A tax statement can help identify a property, but it may not establish the full nature or extent of mineral ownership.