Mineral Rights Investing

Learn how investing in mineral rights can earn you passive income, royalties, and lease bonuses, all with no drilling liability.

Benefits of Mineral Rights Investing

Real Property

Mineral ownership is an investment in real property, like real estate, and owned in perpetuity.

No Drilling Cost

Mineral rights owners pay ZERO expenses and take ZERO drilling liability.

You Are Paid First

Mineral owners are royalty owners and get paid first, before anyone else.

Monthly Checks

Oil and gas sales are distributed monthly to all mineral owners.

Booked Reserves

Mineral rights owners are paid for every zone or reservoir that exists within their defined mineral boundary.

Multiple Wells

Modern technology has lowered drilling risk and increased returns.

Mineral Rights Investing Oil and Gas Pumpjack

What Does It Mean To Invest In Mineral Rights?

Owning and Investing In Mineral Rights Means You Own Real Property

By definition, real property includes the land and anything that is permanently attached to the land. This means buildings, roads, fences, bridges, trees, water and mineral rights are all classified as real property.

So, similarly to owning real property with a real estate investment, when you make an investment in mineral rights, you own a real and tangible property in perpetuity. 

What Are The Advantages Of Owning Mineral Rights?

Owning Mineral Rights Provides Investors with the Advantages of Passive Income, Diversification, and a Hedge Against Inflation.

Before any other invested parties, mineral owners get paid first through monthly royalty checks which provide reoccurring passive income for investors. This kind of passive income stream allows investors to diversify their portfolios beyond traditional asset classes, while simultaneously providing them with tangible assets that can appreciate over time and that can help them safeguard their portfolio against the eroding effects of inflation. 

How Do You Make Money Investing in Mineral Rights?

Let's Talk Financials of Mineral Rights

First, let's start with owning oil and gas mineral rights enables you to receive royalties. You earn these royalties from what's produced and sold from your mineral rights property. Now, maybe you don’t have all the tools and resources as a mineral owner to shovel your way 10,000 feet below surface. So, you make a deal (lease agreement) with an oil and gas company that does have the tools and resources to get the oil and gas. There is a lot to consider to ensure you pick the right oil and gas company for that job. Let’s skip that for now and focus on the money.

Getting a One-Time Payment for Leasing Your Mineral Rights

Now, as a mineral rights owner, you don’t have time to waste waiting on the oil company to extract your ‘black gold’. Therefore, you set in the agreement a timeframe – usually 3 years. But you don’t have the oil company lock up exclusive rights to your minerals for 3 years without something in return. You have the oil company pay you a ‘lease bonus’ to hold exclusivity to your mineral rights for that time. To be more specific, you agree to a price per mineral acre you own. You may even give the oil company an option to extend this agreement for another 2 years. Of course, for another lease bonus per mineral acre.

Keeping Royalties Without Exploration Risk

Next, should all go well (no pun intended), you want to keep a piece of all future oil and gas produced. That’s part of the lease negotiations and usually falls between 12.5% and 25% of revenue from your minerals. That is your royalties just for being a mineral owner. But we will get into more detail shortly.
Let's take a break for a second. You are likely asking yourself a question...

Why Are Oil and Gas Companies Not Buying Mineral Rights?

They are. Not all of them though. They are in business to drill, take on most of the risk and revenue, and get tax benefits for doing so. In essence, oil and gas companies have a different business model and financial incentive than mineral owners. If you want to learn how to be more like oil and gas companies, check out our page on Investing in Wells.
Investing in Wells

Back to Making Money in Minerals

To recap, as a mineral owner you can have an oil and gas company lease the rights to drill and extract your oil and gas. That company will often do so for a lease bonus. A lease bonus is a one-time payment made to the mineral rights owner when the lease is signed. Boom! You just made your first return on owning minerals. Now, let’s look at how you can earn a passive income in minerals.

Earning Royalties from Producing Oil and Gas Wells

It's great to receive a one-time payment for leasing your minerals to an oil and gas company. Nevertheless, it is a one-time payment. As an investor, a mineral owner, and an Eckard Partner we are looking for cash flow and passive income generating assets. We want to consistently crank that engine up and generate an income stream.

 The oil and gas company drilling and producing your oil and gas has previously agreed to pay you royalties for every oil and gas molecule they extract and sell on the market. This is your passive income stream.

Direct Ownership

Eckard sells direct ownership to an investor, mineral rights recorded and filed in a courthouse. This ownership will provide the investor all rights to the minerals acquired. Most of the minerals that Eckard offers already come with leasing agreements to oil and gas companies like Continental Resources, XTO Energy (an Exxon company), Devon Energy, Ovintiv Incorporated or others. Our investing Partners receive royalty payments from the exploration and production of those oil and gas minerals. In addition, our Partners have tangible asset they can pass down to their family, because it's all direct ownership.

Become an Eckard Partner

If everything you’ve read so far, has you interested in investing in mineral rights, investing in oil and gas wells, or just looking to diversify your investment portfolio, contact us. We will put you in touch with one of our Wealth Managers to walk you through the process and share what opportunities we currently have available.
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Invest in Mineral Rights with Eckard

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