Royalty interest

A royalty interest is an interest retained in the output of a property when the owner of mineral rights enters into a lease agreement.  A royalty interest entitles the mineral rights owner to receive a portion of the minerals produced or a portion of the gross revenue from sold production. The holder of a royalty interest is responsible for any production or severance taxes associated with the holder’s share of production. The holder of a royalty interest is usually not responsible for the exploration, development, and production costs of the leased property, so the royalty interest is considered a non-operating interest.

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