Mineral rights are an often overlooked source of revenue for property owners. Sanjit Bhattacharya is the founder and President of Red Stone Resources. The company sells, leases, and purchases mineral rights and working interests. Today, he is here to explain mineral rights and their potential benefits to property owners.
What are Mineral Rights?
Mineral rights are ownership rights. According to Sanjit Bhattacharya, these rights allow the owner to extract or sell the minerals underneath a property. This includes solid and liquid minerals like gold, oil, and metals.
It’s important to note that mineral rights are often separate from surface rights. This means it’s possible to own a property without owning the mineral rights.
Property owners should understand whether mineral rights are included when purchasing a property. The owner of the mineral rights has the ability to extract the rights themselves or sell the authority to extract the rights.
What Minerals are Included in Mineral Rights?
The minerals included can vary based on local laws. Generally speaking, mineral rights include the following:
- Oil
- Natural gas
- Coal
- Rare earth elements
Mineral rights also include precious and non-precious metals. These include:
- Gold
- Silver
- Mercury
- Aluminum
- Copper
Some materials are not included within mineral rights. These include limestone, sand, gravel, and water beneath the surface.
Selling or Leasing Mineral Rights
There are two basic options when it comes to mineral rights. You can sell the rights outright or lease the mineral rights.
Leasing Mineral Rights
When you lease mineral rights, you can extract the minerals for a specified amount of time. Generally, a lease contract will provide you with a small upfront payment.
Then, you’ll receive a percentage of the revenue when the minerals are sold, usually 12% to 25%. These payments are sent periodically.
This can provide a steady source of revenue, improving your financial situation. The amount you receive will
Selling Mineral Rights
Selling mineral rights allows you to receive a large up-front sum. One of the advantages of this method is that you have a clear understanding of the revenue you will receive. You’ll also receive it in a lump sum rather than periodic payments.
Holding Mineral Rights
Sanjit Bhattacharya says that there are a few ways mineral rights can be held. These are a unified estate, severed estate, and fractional estate.
A unified estate means the same person or company holds surface property and mineral rights. The two are tied together.
A severed estate means that the mineral rights and surface rights are separate. This means one person can own the mineral rights, and another can own the surface rights.
The last holding is fractionated. In this case, one person or company owns a portion of the mineral rights.
Sanjit Bhattacharya
Sanjit Bhattacharya has 25 years of experience as an entrepreneur and business leader. He founded Red Stone Resources LLC in 2012. Over the years, the company has established offices in Oklahoma City, Dallas, and Pittsburgh.
Red Stone pursues oil and gas assets across the leading basins. This allows the company to meet their goals while providing great service to its clients.
