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It is true; people do indeed still own their land while oil and gas companies are drilling a well.
[/vc_column_text][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/1″][vc_column_text]In most countries the government owns rights to minerals that are found within the Earth. But in the United States mineral rights are given to the owner of the surface in which they fall under, unless there has been a previous conveyance, or severing of the mineral rights from the surface owner in the past.  In many, the current surface owner is also the mineral owner.
[/vc_column_text][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/1″][vc_column_text]When companies are interested in exploring a property located at an oil or natural gas play, they must come to a mutual agreement with the owners of the mineral rights before production can begin.The agreements are known as mineral leases.
[/vc_column_text][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/2″]A mineral lease is a contract signed by an oil and gas company and land owners. The signed mineral lease is a contract that allows the leasing of a landowner’s minerals so that they can be produced by an energy company that has the ability to access the minerals that would otherwise be undeveloped.
[/vc_column][vc_column width=”1/2″][vc_single_image css_animation=”” image=”4879″ border_color=”” img_link_large=”” link=”https://wellsaidcabot.com/wp-content/uploads/2013/08/Landowner.jpg” img_link_target=”_self” img_size=””][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/1″][vc_column_text]Each lease can have different terms, but some of the provisions often included in leases are:  a signing bonus, a certain length of time before it will expire, the option to extend the length of the lease, and a royalty payment if there is production from the exploration.
[/vc_column_text][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/1″][vc_column_text]In exchange for the rights of the minerals, land owners usually get a bonus per acre. This price is determined by multiple factors, such as: the price of the mineral that is being explored, competition in the area seeking the same leases, and how developed a particular area is.
[/vc_column_text][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/1″][vc_column_text]The company and landowners establish when the mineral lease will end; however, production is the real deciding factor. If a five year lease is signed, and a well is still producing after the end of the fifth year, the lease continues to be valid. Conversely, if the well is not producing at the set end of the lease the owners can explore options to release with the company or look into other alternatives such as renegotiating the terms of the mineral lease.
[/vc_column_text][/vc_column][/vc_row][vc_row animation=””][vc_column width=”1/1″][vc_column_text]Royalty payments are given only when the well begins producing. These payments are also predetermined on the lease. Royalties average around 12.5% of production, but can vary depending upon the area and other factors.
[/vc_column_text][/vc_column][/vc_row]The ownership of the land never changed hands, and the land owners never lose their mineral rights.
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