Mineral interest definition
/What is a Mineral Interest?
A mineral interest is an economic interest in subsurface minerals. This interest gives the owner the right to mine the minerals situated beneath the surface of a property. In a mineral interest arrangement, each party individually holds an interest in an oil and gas asset and is also liable for any obligations that may arise. It is possible to acquire mineral rights separately from the surface rights of a property.
For the purposes of this definition, minerals are assumed to include hydrocarbons.
Mineral Interest Conveyances
An organization may convey mineral interests in its properties to a third party, perhaps to spread risk or to obtain additional financing. These conveyances may involve the transfer of some or all of the rights and responsibilities associated with a property.
Accounting for a Mineral Interest
Since no separate legal entity is involved in a mineral interest arrangement, each party records its proportionate share of the underlying revenues, expenses, assets, and liabilities.