Mineral interest
Ownership of the minerals themselves, including the right to lease them and receive bonus and royalty. This is what most family interests are.
Royalty and overriding royalty
A royalty is a share of production free of drilling cost. An overriding royalty is carved out of a lease rather than out of the mineral estate, and it typically ends when the lease ends.
Working interest
A working interest carries a share of costs and liabilities. Owners are sometimes surprised to learn their interest is working rather than royalty, usually after receiving a joint interest billing instead of a check.
Deductions
Post-production deductions for gathering, compression, and processing vary by lease language and state. Two owners in the same unit can net different amounts for that reason.
This page is general information, not legal, tax, or financial advice. Titan Property Investors is not a law firm or title company.