[dalmations202]

Originally Posted by wmbwinn

you can purchase mineral rights, of course. As a matter of fact, most of the energy companies in the US actively look to buy mineral rights as they find the opportunity. Generally, the selling price is roughly the value of royalties received for three years. So, beynond three years you start to turn a profit. It is a good business investment plan if you can buy those rights. Generally, those mineral rights have been handed down in inheritance to each progressive generation with heavy dilution of the value. Millions of people have a 0.0015 share in this well or that well and they get around 30 dollars per month for it if it is producing. If you want to buy mineral rights, then what you do is find people (like me) with mineral rights that are so watered down that the royalty is 30 dollars per month. The paperwork including the division orders and the tax filing is much more trouble than the royalty is worth. But, if you can find a lot of people like me, then you can buy a lot of mineral rights and make it worth your time and investment. I get emails and letters all the time from people wanting to buy mineral rights. Actually, most of them come from the company paying me (such as Chesapeake).

You are right that the owner of the mineral rights is not taxed directly for that mineral right in the same fashion that the land owner pays property tax. It would be terribly complicated to come up with some way to tax the mineral right. All land has a mineral right attached to it. So, does all land have a mineral right "property tax"? Most land does not produce anything to be sold with that mineral right. It, to me, makes more sense to tax the royalty as a method to tax mineral rights that produce and leave the others alone.

Anyway, the royalty is taxed heavily.

And, you would also probably be appalled to find out how royalty goes to the state instead of persons. A lot of people with minimal royalty checks just quit filing the division orders, and the companies are legally obligated to send the royalty money to the state. But, am I going to hand my 30 dollars per month boondoggle to my three children such that they have to fight all the same paperwork for ten dollars per month? Of course not. It would be cruel.

This is how I understood it as well.

With that said, if you taxed the mineral rights, on non-producing stuff, then it wouldn't get so demolished, and land owners would have more rights with it.

As it is, there is no reason to give up mineral rights. They only cost me "if" it has something producing on it. It might pay off "if" they find something in the future. But, leasing the oil rights, and other issues which cause only the lawyers to profit happen, when it gets split drastically.

If the mineral rights stayed with the landholder, then large oil companies would own all the land. I understand that one.

If the mineral rights went back to the landholder, IF it had been 10 years without production, or you are taxed for them, then people wouldn't keep them just to keep them.

As it sits on my land, if I didn't have controlling interest of the mineral rights, the controlling interest mineral person could lease my land, and them put a well on it -- without my OK. Now I could sue for damages, but only surface damages and not for the loss of value based on the fact that no one wants to live right next to an oil/gas rig. I would also only get surface % of the minerals.

Plus the laws allowing horizontal drilling are just as horrendous.

In fact, this last year, the last 22 acres that we bought -- we could only get 50% of the mineral rights from the guy -- he kept the other 50%. Then he died, and his daughter in law signed a lease agreement on our land @ much less money than we signed the rest of the land for. PO'd me because we were landholder and had 50% minerals, but she signed the lease. That was ignorant how that worked.

Back to my point. If you could send mineral rights back to the land owner -- when it isn't producing -- and tax the mineral right (which would keep people from just diluting them farther and farther) -- then you could add taxes, and value.