How to Reap Great Benefits from Oil and Gas Royalties

According to the US government there are few states which are found to be of the highest mineral wealth such as Texas, Ohio, Pennsylvania, West Virginia, New Mexico, Oklahoma and much more. The people of these states can be highly benefited from the royalties they will be receiving by leasing their mineral rights to the oil and gas companies. As the exploration companies are much focused on exploring even the small and large lands, the land owners can gain potential gains from the exploration as their lands are already stated by the highest producing mineral rights.

Not only the larger fields, the smaller fields will even have a great future of oil production hence the oil companies are focusing on them along with the larger areas. They are ready to buy the mineral rights, lease the mineral rights and also encourage the land owners to sell working interests of their lands. They are ready to take any kind of risk in terms of production, however they are much concentrated on leasing the rights which posses potentially low risk and land lease is also a win-win situation for both the parties.

Leasing is also beneficial for the surface owners since the price of the gas in US is consistently increasing from the past 4 years. As they get 12% royalty from the total production, the royalties will make a huge profit for them. Whereas, selling the royalties is also beneficial for the surface owners as he can retain the property for the future. Moreover, the land owner will never be a part of risk once he completely sells his rights and these risks will be completely borne by the mineral exploration company.

However, for the people who are involving in such deals for the first time, it is often essential to take the help of the professionals like the geologists and the lawyers. A geologist can find the extent, quantity and the kind of mineral in the surface and hence the surface owner can take the advantage of this lucrative option. Whereas, lawyers support is required to make effective decisions, to get best deals and to understand the agreements.

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Updated: December 5, 2011 — 9:25 am
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