There are three types of ownership in oil and gas exploration and production. An investor can choose when investing in the oil and gas industry to participate as a working interest, or mineral interest owner. Working interest owners have a lease agreement with the mineral owner that grants rights to explore, drill and produce oil and gas from the specified property.
A mineral ownership is recorded and deeded as real property, outlining ownership of all minerals, like oil and gas, below surface. A mineral owner leases the mineral rights to an exploration and production company that is seeking to exploit and produce those minerals such as oil and gas. In exchange the mineral owner receive an up-front payment (lease payment) as well as retains a royalty interest of all future revenue.
The third ownership is overriding royalty interest, which has much of the same benefits as the mineral owner. Nevertheless, an overriding royalty interest owner does not own the mineral rights. Matter fact, an override can only claim the rights to a set ownership interest, agreed to in a lease agreement. Should the agreement expire, so will the ownership of the overriding royalty.