Introduction to Mineral Rights, Leasing and Permitting

Once an oil and gas exploration and production company (operator) has identified a promising hydrocarbon play or has decided to drill a well within an existing oil or gas play, the focus moves to the leasing and permitting stage.

Leasing gives a company the access to mineral rights for the purpose of extracting oil and gas from an area of interest, while permitting gives the company the regulatory approvals to move forward with the extraction operations. In this section. we will cover both critical processes and in addition, a brief introduction to mineral rights will be provided because they are an integral part of the leasing process.

This lesson focus on leasing and permitting in areas where mineral rights are held by private entities and will only briefly discuss leasing and permitting of federal or Indian tribal minerals.

Why It Matters

Mineral rights are an important part of oil and gas development in the United States and play a fundamental role in the leasing and permitting processes. Leasing and permitting varies from region to region but there are some commonalities that are useful to understand, as they can address concerns from nearby residents, citizens, mineral owners, and operator personnel.

Learning Objectives:

  • Understand the basics of mineral and surface property rights.
  • Understand the major components and goals of leasing.
  • Understand the general process of permitting an oil and gas well and the initial interaction between the state regulatory agency and the operator.
  • Understand basic topics checked during a field inspection related to the drilling permit.

Images: “Aerial Drilling” by Jim Ladlee for Top Energy Training