Oil & Gas Royalty Overview
Owners of oil and gas mineral, royalty and overriding royalty interests are entitled to revenues from the production of an oil and gas well without being responsible for the drilling and monthly operating expenses. Below is a breakdown of the differences between mineral, royalty and overriding royalty interests.
Mineral Rights
- Owns minerals under the ground.
- Receives income from oil and gas production.
- Execute leases and collect bonus payments.
- Ownership continues after production stops.
Royalty Interests
- Owns minerals under the ground.
- Receives income from oil and gas production.
- Does not execute leases.
- Collects up-front bonus payment.
- Ownership continues after production stops.
Overriding Royalty Interests
- Does not own minerals under the ground.
- Owns and receives a portion of revenues generated from oil and gas production.
- Ownership expires when lease is abandoned or when production is stopped.
- Created from working interests.
- Does not execute leases and collect bonus payments.
- Does not collect up-front bonus payment.
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