FEE MINERAL RIGHTS

• The term “Fee Minerals” usually refers to non-producing minerals
• Owns the real-property rocks, minerals, and oil & gas under the ground
• Can execute a lease with an energy company to drill for oil and gas
• Collects lease bonus payment
• Owns the minerals in perpetuity, whether oil and gas is being produced or not
• Will receive royalty income once oil and gas is produced
• Cost free interest
  

ROYALTY INTERESTS

• The term “Royalty Interests” usually refers to producing minerals
• Owns or has the rights to the real-property rocks, minerals, and oil & gas under the ground
• Receives income from oil and gas production
• Is subject to the terms of the existing lease with the energy company
• Owns the royalties and revenue stream in perpetuity
• Cost free interest
  

OVERRIDING ROYALTIES

• Does not own the rocks or minerals, but has a right to receive a portion of revenues from oil and gas production
• Ownership expires when oil and gas production stops or lease is abandoned
• Owner does not execute leases or collect any lease bonus payments
• Cost free interest
  

WORKING INTEREST

• Owns a portion of the term lease, and does not own any part of the minerals
• Owner responsible for their pro-rata share of any drilling or operating expenses associated with the lease
  

About Minerals and Royalties

OIL & GAS ROYALTY & FEE MINERAL OWNERSHIP EXPLAINED

Oil and gas mineral, royalty, and overriding royalty interest owners are entitled to a portion of the revenues from the production of oil and gas on their property without being responsible for well drilling costs or monthly operating expenses. Whereas working interest owners are usually responsible their pro rata share of the drilling costs, other capital expenditures, and operating expenses on the property.