Are mineral rights valuable? Well, yes and no. Below, we will answer this question by exploring the different kinds of mineral rights and mineral rights valuation.
The Short Answer
Yes. Mineral rights are valuable.
Owning mineral rights is just like owning land or any other property. Of course, mineral rights entitle you to all of the valuable resources that can be found within the plot’s subsurface. Because of this, mineral rights are both valuable as an asset, as well as a potential source of income from the extraction and sale of oil, gas, or other minerals.
The Long Answer
As outlined above, mineral rights valuation has two distinct ways of measuring. The first comes in the form of non-producing mineral rights. The second comes into play when an oil or gas company is able to buy or lease your mineral rights. Below, we will outline the key differences between producing mineral rights vs. non producing mineral rights.
Non-Producing Mineral Rights
You own non-producing mineral rights if there are currently no oil or gas companies extracting minerals from your property’s subsurface. For homeowners, mineral rights are common in deeds as a part of a fee simple estate.
In a fee simple estate, a person owns both the surface and subsurface (mineral) rights. Conversely, in a split estate, you may only own your surface rights while another individual or entity retains the mineral rights.
Non-producing mineral rights valuation can be really high. Then again, they can also not hold much value at all. Obviously, there is a huge difference in the mineral rights valuation of a 50-square-foot yard in Dallas vs. 16 acres near existing oil fields.
Producing Mineral Rights
Producing mineral rights are inherently valuable because they produce a stream of income. If an oil company produces and sells resources from your land, then you are entitled to a percentage of the income.
The amount of money you earn will be based on your percentage mineral rights ownership share as well as the terms agreed between both parties. Typically, mineral rights leases for oil and gas companies agree to pay landowners monthly for the sale of the extracted minerals.
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