Proactive Steps Every Mineral Owner Should Take to Safeguard Their Asset
Owning mineral rights can be a valuable long-term asset—but just like any investment, it requires care, strategy, and attention to detail. Unfortunately, many mineral owners fall into avoidable traps that can compromise the value, income potential, or even ownership of their mineral rights.
Whether you’re new to mineral ownership or you’ve held interests for decades, taking proactive steps to protect your mineral rights is essential to keeping them in good standing. In this blog, we’ll walk you through the most common pitfalls and, more importantly, how to avoid them.
1. Know Exactly What You Own
It may sound obvious, but many mineral owners don’t have a full understanding of what they actually own. Do you hold mineral rights, royalty rights, or both? Is it a working interest or a non-participating royalty interest? Is it an overriding royalty interest, and why does it matter?
✅ What to Do:
- Review your deed, lease agreements, and any associated title documents.
- Work with a landman or title professional to ensure your ownership is accurately documented.
- Store all legal documents in a safe and organized location (both physical and digital copies).
2. Keep Contact Information Updated
Operators and county offices need to be able to reach you for payments, tax notices, and lease agreements. If you’ve moved, changed names, or inherited mineral rights, failing to update your contact info can lead to lost income—or even legal issues.
✅ What to Do:
- Update your address with county courthouses, operators, and division order departments.
- Notify operators of any change in ownership due to death, divorce, or sale.
- File necessary paperwork to transfer or probate ownership when applicable.
3. Stay On Top of Lease Terms and Expirations
A mineral lease gives an operator the right to develop your minerals. However, if you’re not actively managing those lease terms, you could end up locked into a bad deal—or worse, miss out on future income when a lease quietly expires.
✅ What to Do:
- Calendar lease expiration dates and set reminders well in advance.
- Review the habendum clause and shut-in provisions to understand when a lease might expire or be extended.
- Review and understand the retained acreage clause as well as any depth severed pugh clauses associated with your lease.
- Work with a professional when negotiating lease terms to avoid below-market royalties or unfavorable clauses.
4. Monitor Production and Royalty Payments
Even if you’re receiving royalty checks, that doesn’t guarantee everything is correct. Payment errors, missed wells, or incorrect decimal interests can cost you thousands over time.
✅ What to Do:
- Request and review check stubs and production reports.
- Compare production data with state agency records (like the Texas Railroad Commission or Oklahoma Corporation Commission).
- If something seems off, contact the operator—and don’t hesitate to involve a mineral audit specialist.
5. Pay Attention to Property Taxes
Mineral rights, especially producing ones, are subject to ad valorem (property) taxes. If left unpaid, counties can place liens on your interest or even auction your mineral rights at a tax sale.
✅ What to Do:
- Confirm your property tax account is set up with the county.
- Pay all taxes on time—even if they’re small, they protect a large asset.
- If taxes seem unusually high or inaccurate, consider a valuation appeal.
- Do not rely on the taxing authority to notify you. It is the mineral owner’s responsibility to pay their property taxes, regardless of whether or not they are billed for them.
6. Avoid Signing Without Understanding
Too often, mineral owners sign leases, amendments, or sales agreements without fully understanding the long-term implications. One signature can impact your asset for decades.
✅ What to Do:
- Never sign a legal document without reading it fully.
- Consult a trusted mineral advisor before agreeing to terms.
- Be especially cautious of unsolicited offers that pressure you to act fast.
7. Don’t Assume Price Is the Only Factor
When selling mineral rights or negotiating leases, the highest dollar amount isn’t always the best deal. Terms, clauses, and the long-term value of your interest can outweigh a quick payout.
✅ What to Do:
- Evaluate total deal structure, not just the price. There are nefarious strategies deployed by some where an inflated number is presented.
- Understand your long-term goals: Is this income for retirement? A family legacy? A short-term gain?
- Work with buyers or lessees who treat the process as a relationship, not just a transaction.
8. Keep an Organized Ownership File
Managing mineral rights can feel overwhelming—but staying organized makes it much easier to track leases, payments, taxes, and legal documents.
✅ What to Do:
- Create a master mineral file, both digital and physical.
- Include deeds, leases, royalty statements, tax records, and correspondence.
- Update it regularly and share access with heirs or trusted advisors.
Final Thoughts
Mineral rights can be a lasting and valuable part of your wealth—but only if they’re actively managed and protected. By avoiding these common pitfalls and taking proactive steps, you not only safeguard your interests but also position yourself for long-term financial success.
At ES3 Minerals, we believe mineral owners deserve more than just offers—they deserve guidance. Whether you’re navigating ownership questions, evaluating a sale, or just want to better understand your rights, our team is here to help.
Have questions about managing your mineral rights or avoiding these pitfalls?
Let’s talk. Contact ES3 Minerals for a no-pressure conversation focused on your goals and your future.
