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Oil and Gas Mineral Rights Attorney

Insight into Mineral Rights in Colorado

Colorado, Wyoming, North Dakota Service Areas


Mineral rights in Colorado include the legal ownership and benefits associated with underground resources such as oil, gas, coal, and other valuable minerals. Mineral rights are typically separate from surface land ownership, allowing individuals or entities to exercise their mineral rights in association with the exploration, and profit from the resources beneath the land’s surface. Colorado’s mineral rights framework is governed by a combination of state and federal laws, including regulations regarding leasing, drilling methods, environmental protection, and royalty payments. 

The Denver-Julesburg Basin, commonly referred to as the DJ Basin, stretches across northeastern Colorado, southeastern Wyoming, and western Nebraska. This geological formation has become a cornerstone of Colorado’s economy due to its rich mineral resources. Within Colorado, the DJ Basin extends into the following counties: Weld County Adams County Morgan County Boulder County Larimer County Other counties within Colorado that have present oil and gas operations that contribute significantly to the state’s energy sector include: Garfield County, La Plata County, Rio Blanco County, Yuma County, and Cheyenne County.

Earning Money from Mineral Rights: Royalties and Lease Payments

Mineral owners make money from their mineral right ownership through various means, including lease bonuses and royalty payments. When mineral owners lease their mineral rights to oil and gas drilling companies, they receive a lease bonus upfront, which is a lump sum payment. Additionally, mineral right owners typically earn royalty payments, a percentage of the value of the minerals extracted, as compensation for allowing companies to use their land for oil and gas extraction. Royalty payments can provide a steady income stream for mineral rights owners, often lasting for the duration of the production period. 

In addition to lease bonuses and royalty payments, mineral owners also have the option to sell their mineral interests outright. By selling their mineral rights, owners receive a lump sum payment based on the current market value of the rights. This allows mineral owners to realize immediate financial gain without the ongoing involvement or potential risks associated with exploration activities. However, selling mineral interests means relinquishing future rights to any profits generated from resource extraction on the property.

Common Legal Issues with Colorado Mineral Rights

Common legal issues involving mineral rights in Colorado often include probate proceedings for transferring ownership of mineral rights after the owner’s death. Additionally, ancillary probate issues may arise when the deceased owner lived outside of Colorado while owning mineral rights within Colorado. Also, issues related to abandoned mineral rights and inherited mineral rights can arise, requiring legal mineral title clarification and resolution. 

Mineral Right Probate Issue with Example: 

Russ and Moria, both residents of Colorado, owned mineral rights in Weld County, Colorado. Russ had executed a valid Colorado Last Will & Testament listing Moria as the sole beneficiary of his estate. Assuming Russ did not do any specific estate planning for his mineral rights, following Russ’s passing, Moria would seek to transfer the mineral rights to her name through the probate process. Since Russ had executed a valid Last Will, the mineral rights would pass according to the terms outlined in his will. However, depending on the titling of the mineral rights, Moria may have to open a probate proceeding to receive the necessary court paperwork to transfer the estate of Russ’s mineral interest to Moria as an individual. Upon the completion of the probate process and the execution of a valid personal representative deed, which was properly recorded in the Weld county courthouse, Moria would become the sole owner of the mineral rights in Weld County. 

Mineral Right Ancillary Probate Issue with Example: 

In the event where Russ & Moria were residents of Wyoming and Russ owned mineral interest in Weld County, Colorado, Moria may have to execute an ancillary probate proceeding in order to transfer Russ’s mineral interest to herself. Ancillary probate is a legal process that occurs when an individual passes away owning property in a state where they were not a resident. In such cases, their estate may need to go through probate in both their state of residence and the state where the property is located. Ancillary probate ensures that the property located outside the decedent’s state of residence is properly transferred to the rightful heirs or beneficiaries according to the laws of that state. Abandoned Mineral Rights One common mineral rights issue in Colorado is dealing with abandoned mineral rights. Mineral rights may become dormant or abandoned due to various reasons, such as unclear ownership, lack of activity, or inadequate documentation. Resolving abandoned mineral rights often involves extensive research to determine rightful ownership, potential heirs, or interested parties. Legal proceedings may be necessary to clarify ownership and facilitate the proper utilization or transfer of the mineral rights.

Transferring Mineral Rights: How to Change Ownership

Transferring mineral rights often involves the preparation and execution of a deed. The deed serves as a legal document that formally conveys ownership of the mineral rights from the current owner (grantor) to the recipient (grantee). Depending on the jurisdiction and the specific requirements, different types of deeds may be used, such as a warranty deed, quitclaim deed, or mineral deed. The deed typically includes details such as a description of the mineral rights being transferred, the names of the grantor and grantee, any conditions or restrictions, and the consideration or compensation for the transfer, if any. Once the deed is properly executed, it may need to be recorded with the appropriate government agency, such as the county clerk’s office, to officially document the change in ownership and provide notice to third parties. Overall, deeds play a crucial role in the transfer of mineral rights, providing legal certainty and clarity for all parties involved.

Mineral Rights Lawyers You Can Trust

Below is a list of services we provide to meet your legal needs:

  • Mineral Title Searches
  • Oil and Gas Lease Negotiations
  • Identifying and curing title defects
  • Mineral and Surface Deed Preparation and Review
  • Probate Proceedings Involving the Distribution of Mineral Rights
  • Family Generational Estate Planning for Mineral Interest

If you are managing a situation where identifying mineral right ownership is troublesome, engaged in the oil and gas leasing process, or a personal representative tasked with conveying a mineral interest, it’s important to rely on the expertise of a specialized oil and gas attorney. At the Law Office of Josh Krieg, we possess extensive knowledge in the complexities of mineral rights ownership. Please reach out for a free consultation for your legal situation.

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