Drilling rights

Mineral rights are property rights to exploit an area for the minerals it harbors. Mineral rights can be separate from property ownership (see Split estate).

Ownership of mineral rights (more properly "mineral interest") is an estate in real property. Technically it is known as a mineral estate, although often referred to as mineral rights. It is the right of the owner to exploit, mine, and/or produce any or all of the minerals lying below the surface of the property.

The mineral estate of the land includes all organic and inorganic substances that form a part of the soil. Exceptions include sand, gravel, limestone, and subsurface water—which are normally considered part of the surface estate.

Mineral interests can be found across the entire United States. The most common states known for oil and gas production include Texas, Oklahoma, North Dakota, California and New Mexico. Texas, being one of the highest producers of oil and gas, accounts for nearly a third of both crude oil and natural gas reserves in the United States. The Eagle Ford Shale and Permian Basin in Texas are the leaders in overall production of oil and gas. Therefore, mineral rights are common in these areas.

The Eagle Ford Shale extends into 24 counties. Due to the large amount of brittle carbonate in the Eagle Ford Shale, hydraulic fracking combined with horizontal drilling is the most common technique used during production. As a result, the Eagle Ford Shale is one of the largest producers of mineral rights. The Permian Basin is a “stacked play” with mineral formations spanning the Yates, San Andres, and Clear Fork.

Mineral estates are sometimes severed from the surface estate. Such severance is accomplished with a conveyance or reservation of these rights. This conveyance or reservation includes minerals or substances considered minerals. Although technically not minerals, which are naturally occurring crystalline "solids," legal regimes typically include hydrocarbon resources such as oil and natural gas under the term "mineral rights." Such a conveyance or reservation includes royalties, bonuses and rentals. In the absence of such a conveyance, the surface owner retains the rights.

The five elements of a mineral right are:

The owner of a mineral interest may separately convey any or all of the above-listed interests. Minerals may be possessed as a life estate, which does not permit a person to sell them, but merely that they own the minerals so long as they live. After this, the rights revert to a predesignated entity, such as a specific organization or person.

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Wikipedia