You don't have to sell your property to arrange for someone to drill for oil.
Owning land and owning what's under the land aren't always the same thing. U.S. law allows property owners to separate "surface rights" from the "mineral rights" to oil, coal or iron under the property. If you don't have the skill, money or equipment to drill on your own property, you can make a profit by leasing your mineral rights out to someone who does. To get the best deal, you will need to proceed carefully, know the law and stay aware of potential problems with the lease.
Instructions
1. Check that you actually have the mineral rights. It's possible that one of the previous property owners sold or leased them separately, the Kansas Geological Survey states, and that this information was lost somewhere along the chain of ownership. Your county courthouse should have records of any land transactions, though in some complicated cases -- part of the land has been leased out, but not all of it -- you may need professional help to determine your rights.
2. Hire a consulting geologist to assess your property's mineral potential, the Oklahoma Geological Survey suggests. There's no way to tell how much oil is under your property until someone starts drilling, but an independent geologist can study the land and determine whether there's at least potential enough to interest an oil company in leasing.
3. Ask your neighbors if they've leased out their mineral rights and what price they received. This will give you an idea of how much money for which you should ask. Typically, the Geology website states, land owners receive a "signing bonus" -- a payment for leasing the land for several years -- and a royalty on the value of any oil that's found. The typical royalty is 12.5 percent, but some owners have negotiated more. Some states set a minimum level of royalties that companies have to offer.
4. Contact an oil company about leasing. If there's an oil company actively drilling in your area, you may be able to identify the company from the newspapers or industry newsletters and reports, the Oklahoma Geological Survey states. You can also hire a petroleum landman -- found in the yellow pages under "oil leases" -- a specialist in leases and mineral rights who can help you find the right company to talk to.
Tags: mineral rights, your property, Geological Survey, Geological Survey states, leasing your, Oklahoma Geological, Oklahoma Geological Survey
