Looks like we both got corrected (just joking). Thanks for clarifying that. The point still stands that a lot of those fractional interests go away over time due to the 10 year prescriptive period--which I believe was done to keep minerals in the hands of the average class of people. That still doesn't answer the original question regarding what source of data would show who holds the majority of minerals: average class people or "Big Oil." What I have seen in Railroad Commission records and on Tobin ownership maps indicate not "Big Oil."
Yes, Landowner, you are correct. The common misconception hyped by those opposed to private property rights is that all oil and gas is controlled by "Big Oil" to the detriment of the masses.
A high quality assessment of the true character of the ownership would provide much needed data to inform reasoned debate.
Hello, I am a mineral owner and I am middle class American. I think what you need to be asking is will everyone that is a mineral owner and middle class, let me know and start to count. lol Though you may have more luck acually asking everyone here how many they know. I know some people south of me that used to be middle to lower class mineral and land owners. You might have heard of him, Mr. Peeler. Now, he is a land owner to boot so maybe that doesnât count but all of those ranches in south Texas have been in families for over 75+ years, so they donât sell to âBig Oilâ companies. I myself also inherited my mineral rights from family, to bad everyone in my family was so prolific! I only own about 5000sq ft of rights but I am giving that to my son thatâs going to be a Geologist in a couple of years but only if he never sells it and so on. I have a bunch of family in and around Pecos and Odessa. Iâm not sure who all has sold their rights or not but I know that my Grandfather and his brothers just about owned that whole area at one time or another. I canât be the only one who kept their cut off these ranches. So, there are some more middle class rights owners that arenât Big Oil. Just sayinâ : )
What is "middle class?"
Thank you.
Pat
You say you have about "5000 sq ft of rights". I assume you mean "net mineral rights". There are 43,560 square feet in one acre. So 5000 divided by 43,560 is 0.11478421 or 11.478421% of one acre. If your 5000 sq ft net acres of minerals are inside a 40-acre oil spacing unit, under a 25% royalty lease, you will be entitled to 25% x 11.478421% x 1/40 = 0.00071740 royalty decimal in the well. To translate that to dollars, it is an 8-digit decimal so all you have to do is move the decimal to 2 digits from the end, and get 000717.40. Take off the lead zeroes and add a dollar sign, $717.40. Out of every $1 million produced from the 40-acre oil well, you will receive $717.40. Now do it with a 640-acre gas unit: 25% x 11.478421% x 1/640 = 0.00004484, and you receive $44.84 for every $1 million produced from a pooled gas well.
Statistically, the majority of producing oil and gas wells will produce over their lifetime an amount of revenues roughly equal to twice what it cost to drill and produce the well for that lifetime. Wells currently cost an average of about $2 million to $6 million (horizontals) to drill and produce as a result of the current oil and gas price levels, if no workovers or recompletions are done.
I just thought I'd offer a little perspective. :)
Great question!!! One researcher placed middle class on income between $47,0000 and $141,000 but also includes other factors. Very subjective: http://money.cnn.com/infographic/economy/what-is-middle-class-anyway/
Well big oil is always trying to buy our minerals but they end up leasing them instead as most people don't sell minerals. We have a large contingent of socialists (product of the 60's) living in this country. When eastern Europe collapsed and the Berlin wall fell, these people started working on a new strategy. One of the first things they decided to do was attack the wealthy and the wealth makers. Big Oil was one of their first targets. The last thing they want anyone to believe is that the middle class has some skin in the oil and gas industry. Their only knowledge of the middle class are those that live in the big urban areas. They don't give those of us a second thought that were raised in rural America. Those of us from rural America reside in every state from sea to shining sea and these people don't ever speak to us. The so-called politically astute people tend to just speak to the talking points spoken on MSNBC, CNN and Fox. They really don't know anything about the silent majority and prefer to think we don't exist. I prefer it to remain that way.
There are approximately 8-12 million mineral owners in the US. Over 80% of the drilling in this country is done on private land. That is why the "shale revolution" has taken place in this country and not all around the world. Simply because the private citizens own the majority of the minerals in the country and working with an individual is easier than the government to negotiate a lease. In Colorado alone in 2012, over $614 Million dollars was paid out to mineral owners in a single year.
"In addition, $614 million went to private land owners in 2012, assuming private land owners capture royalty and lease terms similar to those of the government."
- ASSESSMENT OF OIL AND GAS INDUSTRY, 2012 INDUSTRY ECONOMIC AND FISCAL CONTRIBUTIONS IN COLORADO, an economic impact study conducted by the Leeds School of Business at the University of Colorado.
It is the second half of that sentence that is concerning. Further reading in the study would show that the lease bonuses were estimated at $213.4 million using the same standard of measurement.
Unfortunately, it appears that they backed into these numbers by taking an average bonus/revenue of state and federal acres and multiplying that by the ratio of government acreage to private acreage. They then mark the number as Estimated. I really feel they should have provided a range of dollars paid out to private ownership.
At a National Association of Royalty Owners convention someone said that there are about 4 million mineral owners, perhaps one million with reasonable opportunity for development for oil and gas or prior development.
In Arkansas, there are likely 250,000 mineral owners, but most are not producing minerals. A class action in the Fayetteville Shale included over 12,000 members in that play alone who had production.