What Are My Mineral Rights Worth?
- Craig Kaiser
- Jan 19
- 4 min read
Have you ever wondered what your mineral rights are worth? Whether you recently inherited property, are receiving lease offers, or just want to explore the potential value hidden beneath your land, understanding the worth of your mineral rights can feel like a puzzle. This guide will break down everything you need about the value of mineral rights that mineral rights owners need to know in plain terms.
Key Takeaways:
Mineral rights values can vary significantly over short distances due to geologic changes. The variability is attributed to formations with different production potentials, such as Niobrara Shale and Codell Sandstone.
Locatio, production history, future development potential, market conditions, and lease history are the main factors that affect mineral rights values.
A formal mineral appraisal is recommended to accurately determine mineral rights value.
LandApp provides free property reports and the option to list mineral rights for sale or lease on their marketplace.
What are Mineral Rights?
First, here’s a quick primer. Mineral rights give you ownership of the valuable substances beneath the surface of your land. These might include oil, natural gas, coal, or other minerals. If you own mineral rights, you have the legal authority to sell, lease, or develop those resources- often without affecting your surface ownership. However, there is a difference between surface and mineral rights. There are two common scenarios for mineral rights ownership:
Surface Rights and Mineral Rights Combined: You own both the land and what lies beneath it.
Split Estate: Someone else owns one right, and you own the other (e.g., you own the surface, but someone else controls the minerals below).
If you’re unsure about your ownership, checking your property or mineral deed or consulting a legal professional is a great start.
What Influences the Value of Mineral Rights?
The value of mineral rights isn’t fixed- it fluctuates depending on several key factors. Whether you’re interested in selling, leasing, or simply knowing what you’ve got, the elements that matter most are location, production status, market conditions, active leases, and future development potential.
1. Location
The location of your mineral rights is one of the biggest determiners of its value. If your land lies in a proven area, its mineral rights will likely command a premium. Here’s why:
Proximity to Active Drilling: If your property is in an area with ongoing oil or gas production, there’s a higher likelihood that buyers or companies will be interested.
Geological Potential: Some locations have known deposits of valuable resources. For example, regions like the Permian Basin in Texas or the Marcellus Shale in Pennsylvania are hotspots for oil and gas activity.
2. Production Status
Are your mineral rights producing or non-producing? Have your mineral rights been leased? This impacts the value of mineral rights.
Producing Mineral Rights mean that oil, gas, or another resource is actively being extracted, and you’re receiving royalty income. This steady revenue stream makes your mineral rights more valuable. Producing mineral rights without future potential generally sell for approximately 4 to 6 years' worth of your average monthly income.
Non-Producing Mineral Rights indicate there’s untapped potential, but no production yet. These tend to have a lower value, though their worth can increase dramatically if production begins. The value of non-leased mineral rights can be up to $1,000 per acre, often falling between $0 and $250 per acre.
Leased Mineral Rights are mineral rights under an active lease with a developer or drilling company. The value of leased mineral rights is generally 2 to 3 times the value of your lease bonus.
3. Market Conditions
Just like stocks or real estate, mineral rights are subject to market forces. Prices for oil, natural gas, and other minerals can swing based on global supply and demand. When market prices are high, mineral rights typically become more valuable, and acquisition by buyers becomes more competitive.
4. Lease Terms and History
If you’ve previously leased out your mineral rights, the terms of that lease can impact their value.
Lease Bonus – This is the upfront payment a company gives you for signing a lease. Recent bonus amounts can serve as an indicator of market interest.
Royalty Rates – These are the percentages of revenue you receive from production. Higher royalty rates (e.g., 20% instead of 12%) make your mineral rights more lucrative.
5. Future Development Potential
Buyers also look at the long-term development potential of your mineral rights. Futujre development potential is determined by a few different factors:
Is there room to drill additional wells?
Are companies actively expanding operations in your area?
Are technological advancements making harder-to-reach minerals more accessible?
Future potential can add speculative value to mineral rights, though it’s harder to calculate.
6. Uncertainties or Risks
Lastly, risks play a role. Easements, environmental restrictions, or the expiration of energy credits can all impact your land’s attractiveness to buyers or lessees.
What Are My Mineral Rights Worth?
Many landowners wonder "What are my mineral rights worth? "A formal mineral appraisal is generally advised to determine the true value of your minerals. However, you can estimate the value of your mineral rights with a free LandApp Property Report. The following screenshot is from a Property Report for a parcel that has both producing and non-producing oil and gas wells on the property:
The best way to determine the true value of your minerals is to enter the asset into a competitive marketplace and see what different entities are willing to pay. You can list your mineral rights for sale or for lease for free on LandApp's marketplace after getting your free property report:
