What Does it Mean to Convey Mineral Rights?

In the United States, mineral rights can be extremely valuable in earning oil or gas royalties. However, when it comes to selling your property, the documentation may cite “conveying” mineral rights to the new owner as a part of the agreement.

If you are unclear what this means, then you’ve come to the right place. In this article, we are going to define what it means to convey mineral rights and outline some scenarios and benefits in which conveying or retaining mineral rights may be best.

The Definition of Conveying Mineral Rights

In legal terms, “conveying” is a term used to describe the sale or transfer of a property. In a split estate, landowners can choose to convey or retain their mineral rights separately from a property’s surface rights. Essentially, when working with mineral rights, there are three basic ways in which property can be conveyed. They are as follows:

  • Conveying surface rights, while retaining mineral rights.
  • Conveying mineral rights, while retaining surface rights.
  • Or, conveying both mineral rights and surface rights to one or separate entities.

The Benefits of Conveying Mineral Rights

If you choose to sell your mineral rights, then that may earn you a nice paycheck. Plus, if you sell your mineral rights on a parcel of land that is producing oil or gas (or will be in the future), then you may be able to earn a mineral royalty interest on the future sale of resources.

In a fee simple estate, the sale, or conveying, of mineral rights is tied in with the surface rights. Therefore, it is commonplace that the sale of a property also involves the sale of the property’s subsurface. However, in a split estate, it is possible to convey your mineral rights while retaining your surface rights.

The Benefits of Retaining Mineral Rights

Because mineral rights are valuable, obviously, there are also benefits in retaining your mineral rights (rather than conveying them) when selling your property. In the case of a split estate, surface rights can be sold for a large profit, while mineral rights are retained for future earnings. If you still own your mineral rights, then you can explore an oil and gas lease as a great way to earn royalty interests from the resources produced and sold.

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