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Gas and Oil Royalties - Lease Mineral Rights with the Proper Consultant
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Posted On :
Mar-22-2013
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Article Word Count :
491
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Gas and oil royalties may seem very intricate to most of the individuals who have not dealt with them. Actually, they are not as complicated as it may seem. Here you will get an idea about what they are and how they generate revenue.
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Gas and oil royalties may seem very intricate to most of the individuals who have not dealt with them. Actually, they are not as complicated as it may seem. Here you will get an idea about what they are and how they generate revenue. If you are an owner of a piece of property, then you are also the owner of the land according to surface rights. Most often, when you have purchased the land, your purchase included the mineral rights under the land along with surface rights. Possessing the mineral rights signifies that one legally has the right to explore, extract and sell gas, oil, uranium and coal along with other important minerals that reside in the ground.
However, most landowners do not have any idea, and do not undergo any type of training, to understand the opportunity of prospective minerals that may be found under the land. In fact, there are large numbers of landowners who do not even consider being the owner of mineral right under the land. Further, an average landowner does not have a multi-million dollar budget for exploring hydrocarbons or networking skills to raise multi-million dollar exploration money. There are large numbers of energy firms that have enough organizational resources and money to explore gas and oil. Therefore, when they recognize an area that might contain hydrocarbons, they start negotiating with the property owner to lease the mineral right for exploration.
This lease offers such companies permission to explore petroleum and to generate and sell it if they are able to find petroleum in large enough quantities. The owner of the minerals attains two types of compensation for leasing the mineral rights. The first is known as “Bonus Payment” which is defined as signing a bonus paid on the basis of acreage. This bonus will be paid at the time of signing the lease and it might be the only money the owner will attain. The second is known as “royalty” which is a percent of oil or gas generated from the owner’s property. The percentage continually varies depending on how well the owner of the minerals negotiates and how costly the extraction process is expected to be by the oil firm. However, if the oil firm finds no gas or oil in economic quantities, they will abandon the relationship and the lease will expire, and the mineral rights will then return to the owner of the land.
Royalties paid to the owner of mineral rights most often last for many decades. An average well can be productive for nearly thirty five years. Due to the reliable flow of cash, gas and oil royalties are a good source for investment. Finding mineral owners who want to sell their royalties can be the difficult part in this process. This is why a mineral rights consultant is a prudent relationship to build, because they have the knowledge and connections to make it happen.
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Article Source :
http://www.articleseen.com/Article_Gas and Oil Royalties - Lease Mineral Rights with the Proper Consultant_257326.aspx
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Author Resource :
In order to earn the highest revenue, you need to gain sufficient knowledge about mineral rights. An essential step to make sure you have the most current information is to contact Western Mineral Consultants.
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Keywords :
mineral rights, western mineral consultants,
Category :
Business
:
Business
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