Whether to keep or sell mineral rights is a question that both landowners and homeowners need to ask themselves before any real estate transaction. You can either get a lump sum payment for your mineral rights, or choose to keep them with the option of leasing them in the future.

Under U.S. law, mineral rights are treated as real property. You can buy and or choose to sell the mineral rights to most any parcel of land. When you sell land with mineral rights you can choose to retain those that you own or let all or a fraction go to the new owner. Some sellers choose to let a small percentage, such as 1/16th go with the land to make it more attractive to buyers. Those in areas where oil and gas drilling is occurring generally choose to keep all mineral rights when selling property using a “save and except” clause in the deed.

Should You Sell Your Mineral Rights Or Keep Them?

Unless you really need the money now for urgent purposes, you should not sell your mineral rights for a number of reasons. First, you would give up any rights to any oil, gas, coal, etc, ever found on your land in the future. An oil and gas company could drill for oil and gas on your property without your permission. If they do find anything, there could be a producing oil well in your backyard or on your farm from which you get no compensation. For a short term profit you would have given up the opportunity of receiving potentially millions of dollars of oil and gas revenue. For example, in the Dallas – Fort Worth metroplex, landowners were told for years that there was no oil and gas of any economic significance. Shows like “Dallas” which showed pumping oil wells, were laughed at by those who actually lived there since geologists had tried for years to find oil but never had under Dallas county.  In the late 1980′s along came a technology called horizontal drilling, which ended up making it possible to extract natural gas from rock long considered unproductive. Soon the Barnett Shale became one of the largest supplies of natural gas in the U.S. and some landowners in Dallas and surrounding counties who owned their mineral rights became rich. Even owners of city lots as small as one eighth of an acre were getting royalty checks for $600 a month. So, even if you don’t think you are in an area that has any valuable resources, you should never sell your mineral rights.   In addition to loss of future financial gain, your property would be vulnerable to alteration or damage due to mineral extraction or oil and gas drilling, with the surface owner receiving very little compensation for the true impact on the land.  As the mineral right owner you can always choose not to lease your land for oil and gas exploration.   As a surface rights only owner you would be compensated for surface damages from oil and gas drilling but you would not receive any financial benefit from the resource being taken.

A good book for both novices and real estate professionals about oil and gas law is “Oil And Gas Law In A Nutshell”, seen below.

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If you have any doubts about whether to sell your mineral rights or not, consult a qualified oil and gas attorney.  For more on the rights of surface owners and whether or not to sell your mineral rights see Negotiating An Oil and Gas Lease