Introduction
When you buy a plot of land, you may be presented with the option of buying the surface rights, the mineral rights or both. These are critical differences to understand, especially when it comes to selling them later on. If you have an interest in mineral rights investing, then owning the mineral rights is going to be important in any transaction. Here’s what you need to know about the differences between surface rights and mineral rights.
What To Know About Surface Rights
In simple terms, surface rights refer to owning anything that’s on the surface of the land. This includes any physical buildings, dwellings, trees and anything else you can see on the surface. The landowner may eventually sell the property as part of their surface rights, but they are not allowed to sell or lease it to oil and gas companies for exploration purposes. You must own the mineral rights for that aspect.
What Are Mineral Rights?
Mineral rights refer to the oil and gas minerals found deep beneath the surface of any given property. People interested in mineral rights investing are typically more concerned with these rights rather than the surface rights. Owning mineral rights means you have the ability to lease the land beneath the surface for oil and gas exploration purposes. Sometimes investors will own both the surface rights and the mineral rights of a property, but this isn’t always true.
Sometimes Surface Rights and Mineral Rights Don’t Overlap
Things can get somewhat complicated when one person owns mineral rights and another person owns surface rights on a specific piece of land. Anyone who owns mineral rights has the right to allow companies to drill for oil and gas minerals on the land. The most critical aspect to understand is the language in your contract. It may involve the expertise of an attorney to ensure each owner is getting their share and operating within the language of the agreement. There will always be various nuances when it comes to oil and gas minerals, so it’s important to defer to the experts who deal with mineral rights investing daily.
What Does This Mean For Your Money?
Eckard Enterprises deals mostly with mineral rights in the Anadarko, Permian, and Williston Basins, but our expertise covers much more than that. One of the biggest challenges of mineral rights investing is knowing who owns surface rights and who owns mineral rights for any given piece of land. The last thing investors want to experience is a hang-up in a transaction due to not understanding the language in a purchasing agreement. We are here to help you break down this language and maximize your investment when the time is right.
Whether you are already familiar with owning mineral rights and working interest or new to energy ownership, connecting with the team at Eckard Enterprises gives accredited investors access to more than 40 years of oil and gas expertise as well as a wealth of industry knowledge and educational resources.Â
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