What do I need to know about mineral rights?

Hi everyone, my apologies first off for the vague title. I am BRAND new to even the concept of mineral rights. My husband and I just relocated about three weeks ago from RI to NY. We are temporarily renting while we look for a suitable property to purchase.

In the process of researching properties, we began to notice that every property referred to OGM rights and whether they conveyed, didn't convey, were leased, were not leased.

From the reading we have done thus far, we have gathered that the part of NY that we have moved to (the southern tier) is on the verge of some big drilling and whatnot. Something about Marcellus shale.

We have gathered that surface rights are as they sound...owning the surface of a piece of property. And that mineral rights pertain to everything underneath the surface. We have gathered that having a lease means somebody has the right to drill on your land, either above or underneath.

One property that we were looking at had about 40 acres and the seller was retaining the mineral rights with no existing lease. What does this mean for us in regards to the future of the land?

One property that we are interested in sits on maybe 2 acres and the sellers have an existing lease and are conveying the mineral rights. Does this mean we will have royalties? What kind of royalties, how long, and what kind of damage to the land would we expect?

The second property, in particular, is one that we really like. It is a bit overpriced for our budget though. Would it be possible to agree with the seller for them to keep their mineral rights and lease for a certain period of time in exchange for a lower sale price on the home? Is that even advisable?

Let's say we purchase a property with no existing lease and with OGM conveying. What if we're approached with a lease offer in the future? How do we work that? What do we need to know?

Any help is greatly appreciated. We are very very green in this market and therefore, very easily taken advantage of. I am here because I recognize the risks we're in and I'm hoping to mitigate that by asking lots of questions. Thanks again!

Crystal, the Mineral Owner Guide at MineralWeb.com is a great resource for those seeking to learn more about oil and gas royalties.

Mineral Rights can seem like a daunting topic to newcomers, but it is important that you don't rush into any hasty decisions.

In regards to the 40-acre property, the seller may retain the mineral rights and may never sign a lease with a company, so you may not have anything to worry about. However, the seller may lease eventually and the company may decide to drill. In that case, you will probably experience a higher volume of traffic on some of the roads near the property, and you may also have to deal with the noise than any well produces. The drilling may also result in the construction of a road onto your property.

If you cannot currently afford the price of the property including the mineral rights, the seller may agree to retain possession of the mineral rights. You can always purchase them at a later date. However, if the lease becomes more lucrative for the current mineral rights owner (the well or wells begin to produce more or the price of natural gas rises), then the owner may be unwilling to part with the rights at a later date, and you'll be left to deal with the noise of the traffic and well drilling without anything to show for it.

If you are approached with a lease offer, then your neighbors may have received an offer as well. I would consult with them to see what their offers are. The going rate is unlikely to see a significant decrease any time after the initial offer, so it doesn't hurt to be cautious before signing a lease.

Good Morning,

I am hoping someone can help me. I got a call last night from my aunt and she asked if I had a problem signing a form that would allow some mineral rights to be leased for exploration. My mother ( her sister ) passed away and I am one of her heirs. I had no idea that the land existed or that being my mons heir made me part owner of the mineral rights. I have heard about scams and wasnt sure if I need to watch out for anything before I sign. What does it mean if I sign? I know that they may not drill, but is it safe to lease the rights?


Dustin M