In Louisiana, surface rights and mineral rights are two separate types of property ownership.

Owning land on the surface does not always mean you also own what is underneath. Minerals include oil, gas, and other natural resources that can be produced from beneath the ground.

Someone may own only the surface rights, only the mineral rights, or both.

When the mineral rights are owned by someone else, the surface owner may still farm, build, or use the land, but the mineral owner controls whether oil and gas can be developed. This split is very common in Louisiana because minerals often get separated from the land when property is sold, inherited, or leased.

Mineral rights carry special power in Louisiana.

If you own minerals, you generally have the right to lease them to an oil and gas company. You may also earn oil and gas royalties if production takes place. If you do not own minerals, you cannot lease them, even if you own the surface. This is why understanding your ownership is so important.

How Do I Know if I Own the Mineral Rights?

The first place to check is your deed.

Look carefully for any language that says “excepting and reserving all oil, gas, and other minerals.” If that type of wording appears, it means the minerals were not included when the land was transferred.

Even if your deed does not mention minerals, that does not guarantee ownership. Mineral rights may have been reserved by a prior owner many years ago. The only way to know for certain is to have a landman or title attorney perform a full title search that traces the property records back through time.

A good indication that you do own minerals is if you receive royalty payments or have been contacted with lease offers. Oil and gas companies usually research ownership before sending out lease paperwork. Still, those offers are not proof of ownership. They are simply a sign that companies believe you may own the minerals and want to do business with you.

Mineral ownership is not always straightforward.

In Louisiana, there are several different types of interests that can exist. Each one comes with its own rights and limitations. Here are the most common types you may come across:

• Mineral Rights (Mineral Interest)
  This is the core ownership of oil, gas, and other minerals beneath the land. If you own mineral rights, you can lease them to a company and receive lease bonuses and royalties.
• Royalty Interest (RI)
  This is the right to receive a share of production revenue without paying drilling or operating costs. If you have a royalty interest, you collect royalties but do not make leasing decisions.
• Non-Participating Royalty Interest (NPRI)
  This is similar to a royalty interest, but with even fewer rights. You receive royalties from production, but you do not get to sign leases, negotiate terms, or receive lease bonus payments.
  • Executive Rights
    This is the other side of the NPRI.  The authority to make decisions about leasing, such as whether to sign a lease and what terms to agree to. It is possible to own minerals but not hold the executive rights.
• Overriding Royalty Interest (ORRI)
  An interest carved out of an existing lease. It provides a share of production revenue but ends when the lease ends. ORRIs are common for landmen, geologists, or others involved in oil and gas deals, but less common for landowners.
• Working Interest (WI)
  Ownership that carries both the right to develop minerals and the obligation to pay drilling and operating costs. Most landowners do not own a working interest, but it is common for oil companies and investors.

Each type of interest has its own value and risks. Some provide steady income without responsibility, while others come with potential costs. Knowing what you own is the first step to making smart decisions about leasing, selling, or passing minerals down to the next generation.

Leasing your mineral rights is often the first step to earning income from oil and gas production.

A lease gives an oil and gas company the right, but not the obligation, to drill on your property. This means the company can decide whether to drill a well, and you cannot force them to do so. If they drill and find oil or gas, you may receive royalties. If they never drill, the lease may expire without any production.

Leasing matters because it is the first step to turn mineral ownership into real income.

A mineral rights lease is also a legal contract. The terms you agree to will decide how much money you receive and what rights you keep. For that reason, you should always negotiate the best deal you can and never feel pressured to sign quickly.

Below are some of the most important lease terms every Louisiana mineral owner should understand:

• Royalty Rate – The percentage of production revenue you will receive if oil or gas is produced. This is usually between 12.5% and 25%. A higher royalty rate means more long-term income.
• Lease Term – The length of time the company has to drill before the lease expires. Most leases are three to five years. Once production starts, the lease stays active as long as oil or gas is being produced.
• Lease Bonus per Acre – The upfront payment you receive when signing. This is a one-time payment, and the amount depends on location and demand.
• Pugh Clause – Protects your minerals by ensuring that only the acreage included in a producing unit remains under lease. Without it, a company could hold all your land with just one well.
• No Deductions Clause – Prevents the operator from charging you for costs like transportation, compression, or processing of oil and gas. This clause protects your royalty payments.
• No First Right of Refusal – Never agree to give the company the first right of refusal if you decide to sell your minerals. This can reduce competition and lower the price you receive from future buyers.

Leasing can be a valuable opportunity, but it is also a contract that favors the company. By understanding these key terms and negotiating wisely, you can protect your ownership and maximize your income.

Average Price Per Acre for Leasing in Louisiana

Lease bonus payments in Louisiana can vary widely, but most offers typically fall in the range of $50 to $2,500 per acre. Where your minerals fall in that range depends on location, competition, and current oil and gas market conditions.

In some of the hottest areas of the state, bonuses can climb even higher. For example, parishes in the Haynesville Shale play, such as DeSoto Parish, Caddo Parish, and Red River Parish, have seen lease offers exceeding $2,500 per acre when drilling activity is strong. In other regions with less development, offers may be much lower, or you may not see any lease activity at all.

The royalty rate is just as important as the lease bonus. Across Louisiana, the average royalty rate is usually 18.75% to 20%. In the most competitive areas, mineral owners often negotiate rates of 20% to 25%. Over time, royalties generally generate far more income than the one-time lease bonus, which is why negotiating for a strong royalty rate is critical.

If you are approached with a lease offer, remember that both the bonus and the royalty rate are negotiable. Do not assume the first offer is the best you can get. Talk with neighbors, research recent lease activity in your parish, and seek professional advice if needed. Securing a fair lease today can mean steady income for years to come.

Selling mineral rights gives you a lump sum of money upfront, while holding lets you collect royalties over time. The right choice depends on your financial situation and how active oil and gas development is in your area.

As a general rule, if minerals make up more than 5% to 10% of your total net worth, it may make sense to sell. Too much concentration in one asset can expose you to risk, especially in an industry where prices and production are unpredictable. Selling provides certainty and cash today, while also simplifying estate planning for heirs.

Holding is still a reasonable option of the value of your ownership is below 10% of your overall net worth. Royalties often add up to more than a sale, especially if new wells are drilled. Once you sell, you give up all future upside.

However, for mineral owners who inherited, selling is often the right choice due to tax savings.

A Recent Inheritance Trick 

If you inherited mineral rights, you may be in a favorable tax position. Inheritance provides a “step-up” in basis, which resets the value to the date of inheritance.

Because of this, if you sell shortly after inheriting, you may owe little to no capital gains tax. It is common for heirs to pay around 5% or less in taxes when selling soon after inheritance. This makes selling attractive for families who want to simplify ownership and reduce future tax burdens.

The decision to sell or hold is personal. The key is to weigh immediate cash against the potential for long-term royalty income and choose the path that best fits your financial goals.

If you decide to sell your mineral rights, using a mineral rights broker is often the best way to maximize your value.

A broker’s job is to bring multiple buyers to the table and guide you through the process so you get the best deal possible. Many owners who try to sell on their own end up accepting far less than what their minerals are truly worth.

Here are the key ways a broker can benefit you:

• Creates Competition Among Buyers
  Instead of negotiating with just one buyer, a broker markets your minerals to many buyers at once. This competition usually drives the price up and ensures you get fair market value.
• Saves You Time and Effort
  A broker handles the legwork of contacting buyers, reviewing offers, and coordinating the sale. This allows you to avoid the hassle of trying to manage everything yourself.
• Understands Market Pricing
  Brokers know what minerals are selling for in different parishes across Louisiana. They can quickly spot offers that are too low and help you negotiate better terms.
• Protects You from Bad Contracts
  Sale agreements often contain legal language that favors the buyer. A broker helps you avoid hidden clauses that could reduce your payment or create future problems.
• Gets the Deal Closed
  Some buyers tie up minerals under contract without the funds to close. Brokers work with trusted buyers and make sure you actually receive payment.

A lot of mineral owners are concerned about a brokers commission.  It is true that brokers earn a commission, but this should be viewed as an investment rather than a cost.

Many mineral owners focus so heavily on avoiding a commission that they sell on their own and walk away with far less money.  A quality mineral rights broker will substantially increase the offers for you and more than cover a commission.

When choosing a mineral broker, look for someone who understands the local Louisiana market and has experience closing mineral transactions.

A simple Google search can help you identify the best mineral rights brokers in Louisiana with strong reviews and proven results. Taking the time to select the right professional can protect your rights and maximize your payout.

The value of mineral rights in Louisiana can vary widely.

A simple rule of thumb is that minerals are often worth about three to six years of recent royalty income. If your minerals are not producing, value depends more on location and future drilling potential.

To determine mineral rights value in Louisiana, take the average of your 3 most recent royalty statements.  Then multiply this number by 3 years and 6 years to find the mineral rights value.

This is only a starting point. Actual value is determined by what buyers are willing to pay, which can change with oil and gas prices, lease terms, and local drilling activity.

Average Price Per Acre in Louisiana

Across most of the state, mineral sales range from $500 to $5,000 per acre, with $1,000 to $3,000 being common in moderately active areas. In parishes with strong Haynesville Shale activity, like DeSoto, Caddo, and Red River, minerals can sell for more than $10,000 per acre.

Royalty rates also matter. Average leases in Louisiana are written at 18.75% to 20%, while the most competitive areas may see 20% to 25%. Buyers pay more for minerals tied to higher royalty rates.

Why Competitive Bids Matter

The only way to know the true market value of your minerals is to get multiple bids. Offers that arrive in the mail are rarely the best price available. By creating competition among buyers, you give yourself the chance to secure the highest possible value.

Mineral rights are often passed down through families in Louisiana. If you inherit minerals, there are a few steps you should take to make sure ownership is properly transferred and you begin receiving income.

Here is a simple checklist to follow:

• Gather Key Documents
  Collect the will, succession paperwork, death certificate, and any prior deeds related to the property. These establish your legal right to the minerals.
• Notify the Operator
  Contact the oil and gas company operating the wells. They will require legal documents before they can transfer royalty payments into your name.
• Update the Parish Tax Roll
  Mineral rights are taxable in Louisiana. Make sure the parish assessor updates the records so the property tax bill comes to you.
• Begin Collecting Royalties
  Once ownership is updated, you should start receiving royalty checks if there is active production on the property. Always review statements for accuracy.
• Consider Selling After Inheritance
  Minerals receive a step-up in basis at inheritance, which resets the value to the date of death. If you sell shortly after inheriting, you may owe little to no capital gains tax. Many heirs use this as an opportunity to simplify their estate and lock in value with minimal tax liability.

Inheriting mineral rights can be a blessing, but it also comes with responsibilities. Taking the time to properly transfer ownership ensures you protect your new asset and make the most of it.

Taxes are an important part of owning mineral rights in Louisiana. How much you owe depends on whether your minerals are leased, producing, or sold.

If your minerals are producing, you may owe:

• Severance Tax – Paid by the operator to the state on every barrel of oil or thousand cubic feet of gas produced. This tax is taken out before you receive royalties, so you do not pay it directly.

• Income Tax – Royalty payments are considered taxable income and must be reported on your federal and state tax returns.

• Property Tax – Some parishes assess property tax on mineral rights. If you own producing minerals, you may see them listed separately on the parish tax roll.

Special Considerations for Inherited Minerals

If you inherit mineral rights, you should give serious thought to selling. Minerals receive a “step-up” in basis at the time of inheritance. This resets their value to the market price on the date of death.

Because of this, if you sell shortly after inheriting, you may owe little to no capital gains tax. In many cases, heirs pay around 5% or less in taxes when selling inherited minerals. This creates an opportunity to simplify ownership, avoid future tax complexity, and convert minerals into cash with minimal tax impact.

Holding inherited minerals can still make sense if they are producing strong royalty income or are located in an active drilling area. However, for many families, selling shortly after inheritance provides certainty and a clean transfer of value.

Owning mineral rights in Louisiana can be both valuable and complex. From leasing and royalties to selling and taxes, every decision has long-term financial consequences.

If you are unsure about the best path forward, the smartest step is to get professional guidance. A consultation can help you understand what you own, what it is worth, and how to protect your rights.

At Mineral Rights Alliance, we are here to help Louisiana mineral owners make informed choices. Reach out to us today to schedule a consultation and get clarity on your mineral ownership.

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