Types of Interest You Can Own And What You Can Do With Them

Executive Rights to Minerals - Owning the executive rights includes the right to negotiate and execute oil & gas leases, lease bonuses, and delay rentals.

Grantee/Lessee - The entity/person receiving the rights to the lands, minerals, etc. for a term or in perpetuity.

Grantor/Lessor - A person who grants or conveys lands, minerals, etc. for a term or in perpetuity.

Interest - A right or claim to a property.

Mineral Rights - Ownership of the rights to the minerals on or below the surface. Ownership can be limited to depths below the surface.  Just because you have the mineral rights doesn’t mean you own the Executive Rights. 

Mineral rights include: 1. The right to use as much of the surface as is reasonably necessary to access the minerals, 2. The right to execute any conveyances of mineral rights, 3. The right to receive bonus consideration, 4. The right to receive delay rentals and 5. The right to receive royalty. Any or all of the above five rights can be conveyed by the mineral owner.

Net Revenue Interest (NRI) - A share of production after all burdens, such as royalty and overriding royalty, have been deducted from the working interest. NRI is the percentage of production from the well that each party receives.

Non-participating Royalty Interest (NPRI) - A share of production that is free of the cost of production and carved out of the mineral interest rather than the leasehold interest. As an NPRI owner, you do not share in the right to explore/develop a lease or receive bonus or rental payments.

Overriding Royalty Interest (ORRI) - A royalty in addition to the royalty provided in an OGL. ORRI is a fractional, undivided interest with the right to receive proceeds/revenue from oil and gas minerals sold and is free of the cost of production. Overrides expire with the lease.

Royalty Interest - An interest in an OGL that gives the owner of the interest the rights to a share of production or production revenues or value, free of costs of drilling or operating the well. This type of interest is crucial to determine how much the landowner receives in royalties from production, and at what net revenue the operator is receiving his share of profits.

Severed Minerals - Minerals whose title has been severed from the surface title. This results in the surface owner being different than the mineral owner.