Mineral rights give you the legal ownership of oil, gas, and other minerals beneath the surface of the land. In North Dakota, these rights are often separate from the surface, meaning you can own the minerals even if someone else owns the land above.

If your minerals are in an active oil-producing area, you may receive lease offers from energy companies. Leasing mineral rights gives them permission to drill, while you receive a signing bonus and a share of the production called royalties.

Ownership can get complicated over time. Rights are often passed down and divided among family members, which can lead to shared or fractional ownership. It is important to know what you own, where it is located, and to keep your records in order.

Having a clear understanding of your mineral rights is the first step to making informed decisions.

Most mineral owners in North Dakota did not go out and buy their rights. They inherited them.

In many cases, people don’t even know they own mineral rights until they receive a letter from an oil company or a call from a landman.

Mineral rights often stay in families for generations. Over time, they can be split among siblings, cousins, or even more distant relatives. As a result, you may only own a small fraction of the original interest. Even so, that fraction could still be valuable, especially if it’s located in a producing area.

If you have inherited mineral rights, it’s important to get everything properly documented. This includes completing probate if needed and making sure your name is recorded in the county records. Without that, operators may not know who to pay.

Just because a well is already producing does not mean you are automatically paid. You must be placed in “pay status” with the operator. That usually means providing proof of ownership, completing any paperwork they require, and making sure your contact and payment information is up to date.

Many people who inherit mineral rights consider selling, especially if they do not live near the land or do not want to manage it long-term. Selling can also make sense from a tax standpoint, due to something called the step-up in basis. We’ll cover that in more detail in the tax section.

Inheriting mineral rights can be a great opportunity, but it comes with responsibility. Knowing what you own, getting into pay status, and understanding your options are key first steps.

Mineral rights in North Dakota can vary widely in value.

The average price per acre typically ranges from $1,000 per acre to $7,500 per acre. This range covers most producing mineral rights in active areas. However, there are exceptions.

In highly productive areas with strong well performance and high royalty income, prices can exceed $10,000 per acre. On the other hand, in less active regions or places with little to no drilling potential, mineral rights may be worth nothing.

Location is the single biggest factor in determining mineral rights value.

Counties like McKenzie, Dunn, Mountrail, and Williams are often among the most valuable due to their oil production levels. The closer your minerals are to proven producing wells, the more they are likely to be worth.

Mineral Rights Value Rule of Thumb in North Dakota

One common rule of thumb for estimating value is to take your average yearly royalty income and multiply it by 3 to 6 years. This can give you a rough idea of what your rights might sell for. For example, if you earn $10,000 per year in royalties, your minerals might be worth between $30,000 and $60,000.

Keep in mind this is only a guideline.

Buyers may also consider lease terms, drilling activity in your area, market demand, and commodity prices. Producing minerals are generally more valuable than non-producing ones, but leased non-producing minerals can also command strong prices if development is expected.

Before making any decisions, it is wise to get multiple offers or consult with mineral rights brokers who understand the local market. Having a clear picture of value is the first step in making the right move for your financial goals.

Selling mineral rights can be a smart decision, especially if you have inherited them or no longer live near the land.

In some cases, the value of your minerals may be higher than you realize, and selling allows you to convert that value into cash today.

One of the most important things to understand when selling is that competition drives value. If you accept the first offer that comes in the mail, you could be leaving money on the table.

Mineral buyers are often professionals who understand the true value of your rights. It is in their interest to buy low. Your goal should be to sell high.

This is where working with a mineral rights broker can make a big difference. A good broker helps you get your minerals in front of multiple qualified buyers. That competitive bidding process can lead to stronger offers and a better final price. It also helps ensure you are not taken advantage of by lowball offers.

Selling is not just about price. It is also about making sure the buyer is reputable, the paperwork is correct, and the deal closes smoothly. An experienced broker can guide you through that process from start to finish.

If you are considering selling your mineral rights ownership in North Dakota, we recommend reaching out to us for a free consultation. We can help you evaluate your options and connect you with serious buyers who are active in your area. Even if you are just curious about what your rights might be worth, it never hurts to have a conversation.

Mineral rights can generate income, which means they come with tax responsibilities.

In North Dakota, mineral owners may owe property taxes on mineral rights. Royalties from producing wells are also considered taxable income and must be reported each year.

One major tax advantage applies to inherited mineral rights. When you inherit, the value of the minerals is reset to the fair market value at the time of death. This is known as a step-up in basis.

Because of this, many mineral owners who recently inherited rights choose to sell shortly after. Selling during this window can dramatically reduce capital gains taxes. In some cases, the tax owed is minimal or even zero.

If you recently inherited mineral rights, this can be an ideal time to explore a sale. Savvy owners use this opportunity to save a significant amount in taxes. As always, it is smart to speak with a tax professional before making a final decision.

Every situation is different, so it’s always wise to speak with a tax professional before making a decision. However, understanding the step-up in basis can help you make a more informed choice about whether to sell now or hold for future income.

North Dakota is one of the top oil-producing states in the U.S., thanks to the Bakken and Three Forks formations. However, not all counties are created equal when it comes to oil and gas activity. The location of your mineral rights plays a major role in their value and potential for future income.

The most active counties in North Dakota are:

• McKenzie County
  McKenzie County leads the state in both oil production and drilling activity. If your minerals are located here, they are likely to be in high demand.
• Williams County
  Williams County has long been a major producer and remains a strong area for both existing wells and new development.
• Mountrail County
  This county has consistently ranked near the top for oil production. Many mineral owners in Mountrail receive regular royalty income.
• Dunn County
  Dunn County continues to see steady drilling activity and solid well performance. It is considered one of the more stable counties for mineral value.

Other counties such as Divide, Burke, and Billings also have oil and gas activity, but on a smaller scale.

If your minerals are in one of these top-producing counties, it is important to stay informed. Operators often focus their leasing and drilling efforts in these areas, which can impact both your income and your ability to sell for top dollar.

Knowing where your minerals are located is the first step. If you are unsure, a professional can help review legal descriptions and pull production data for your specific area.

Owning mineral rights in North Dakota can be a valuable asset. Whether you inherited them, bought them, or have held them for years, it is important to stay informed and organized.

Keep good records of everything you own, including legal descriptions, leases, royalty statements, and any communication with oil companies. These documents can help avoid delays or issues when it comes time to collect royalties or consider a sale.

Make sure your contact information is current with operators and the county clerk. If a company cannot find you, they may hold payments in suspense until ownership is confirmed.

If you inherited your rights, consider whether holding or selling makes the most sense for your situation. Many owners find that selling after inheritance can offer strong financial value with minimal tax impact. Others may prefer to keep their rights for long-term royalty income.

Whether you decide to lease, hold, or sell, the key is knowing what you own and understanding your options. If you have questions or want help reviewing your situation, reach out to us for a free consultation. We are here to help you make the most of your mineral rights.