Mineral Rights Investors
There are many opportunities for oil and gas investment in the United States, and many investors like to start right at the top as mineral rights investors. What is mineral rights investing, and how can mineral rights investors see profits? If you think mineral rights investing may be appropriate for you, your investment group or your company, here is what you need to know.
How Do Mineral Rights Work?
To extract anything from your land — be it ore, rocks or fossil fuels — you must have the mineral rights to that land. While various other countries grant mineral rights to the government by default, the initial owner or purchaser of a piece of land in the United States owns both the surface and mineral rights — meaning they own the property, everything on it and everything underneath it.
Anyone who is extracting oil or gas from a piece of land must either own the mineral rights or have leased the mineral rights from the owner.
How Can I Invest in Mineral Rights?
There are two types of interests one can have in mineral rights:
- Royalty Interest: In many cases, someone who owns a piece of land rich in oil or gas reserves wants to profit from those reserves, but doesn’t necessarily have the resources to extract that oil or gas from the ground themselves — much less the means to contain, package, refine or distribute it. In these cases, they will lease the mineral rights to a professional oil or gas extraction company in exchange for a royalty. The leasing company will do all the work — bringing in equipment and personnel, drilling the land and extracting the oil for sale. In exchange, they will pay the original owner of the mineral rights a percentage of everything they sell. Thus, the owner is said to have a royalty interest.
- Working Interest: In the second case, the owner of the land may choose to extract the oil him or herself or with a partner. In this situation, the owner is said to have a working interest. With a working interest, the owner takes on a full share of the costs and responsibilities of extracting the fuel, but also gets a full share of the profits. If you invest in mineral rights, you will usually be buying a working interest in an oil or gas well or wells.
To gain working interest, you must invest in an oil or gas company that either buy the land outright, purchases the surface and mineral rights together, acquire the mineral rights separately — accessing the oil or gas through horizontal or angled drilling so as not to disturb the unpurchased surface — or leases the mineral rights. In all of these cases, the oil or gas company will have a working interest in the mineral rights, and by investing, you will have a share of that working interest.
For Help Investing in Mineral Rights Today, Contact Viper Capital Partners
Viper Capital Partners works with accredited investors in the oil and gas space, including mineral rights investors. For information about how you can invest in mineral rights with Viper Capital Partners, get in touch with us now.