Frequently Asked Questions About Oklahoma Oil and Gas Minerals and Royalties
What are oklahoma mineral rights?
- Mineral rights, also known as a “mineral estate,” are the legal rights that a person has to exploit, mine, or produce any materials underneath the surface of the earth. These materials may be any organic or inorganic substance such as ores of metal, coal, oil, natural gas, gemstones, stone, salt, or any other substance besides sand, gravel, or water. The owner of the mineral rights can sell, lease, gift, or bequeath these minerals to any individual or entity they choose. For example, a person may own 160 acres of land, and beneath the surface of that land lies minerals that can be sold or leased or gifted. That person may own the surface of the land, while someone else may own what is beneath the surface; in other words, the mineral rights.
What are Oklahoma oil and gas royalties?
- Oil and gas royalties refer to the amount of money paid to the person who owns the mineral rights after the produced substances like oil and gas are sold by the oil company.
N = Net mineral acres owned by the lessor.
G = Gross mineral acres in the oil and gas drilling and spacing unit.
R = The royalty percentage (or decimal) agreed to in the oil and gas lease.
Revenue interest decimal = (N/G) × R
What kinds of Oil and gas interests are there?
All oil and gas interests share in the revenues from producing oil and gas wells. Often you will find the terms “mineral interests” and “royalty interests” are used interchangeably. However, there are important differences between these interest types.
Mineral Interests in oklahoma
- A mineral interest owner is the person who owns the mineral rights.
Royalty Interests and Non-participating ROYALTY interest in oklahoma
- A royalty interest owner is the person who owns the revenue interest of the producing oil and gas well. Often, the mineral interest owner is a royalty interest owner and a royalty interest owner is the mineral owner. However, in some cases, a royalty interest could also be defined as a non-participating royalty interest (NPRI). This means that the owner does not own the actual mineral rights Rather, the NPRI owner is entitled only to a revenue interest of the oil and gas produced. NPRI owners do not have executive rights, which means the right to negotiate or execute a lease or receive lease bonuses. An NPRI interest is created when a mineral owner chooses to sell the income they are receiving from a property to an investor without selling their mineral rights. In Texas, NPRI owners will be asked to ratify the oil and gas lease executed by the mineral interest owner by the oil company.
Overriding Royalty Interests in oklahoma
- Overriding Royalty Interests are interests created from the Leasehold Estate. The Lessee can assign or retain a royalty interest from the oil and gas lease which is free from the costs of drilling and production.
Working Interest in oklahoma
- The working interest owner is the person or company who owns the right to drill and produce oil and gas. When the mineral owner leases his mineral interest to an oil company, he is leasing the working interest. Working Interest owners are obligated to pay a proportionate share of all costs associated with leasing, drilling, producing and operating a well. After royalties are paid, the WI owners share in the production revenues based upon the percentage of the working interest owned.
Should I hold onto my oklahoma mineral rights?
- Some folks have no cash needs, and they will just hold on to all mineral rights. On the other hand, if enough cash can be raised from a sale to Berlin Royalties, we would argue that it would be foolish not to sell. However, only the individual mineral owner can determine whether he should sell. Oil and gas is the most cyclical industry in the State of Oklahoma and many times a mineral owner will regret not selling all or a portion of his interest after the drilling rigs are stacked and landmen leave town.
Request your No Cost, No Obligation Offer to Trade or Sell Your Oklahoma Mineral Rights and Oil and Gas Royalties by Clicking Here or Calling Berlin Royalties at 918.984.1645