Resources
The Heritage resource library.
The library
Guides, insights, and
answers for owners.
Plain-English resources on owning, buying, selling, and exchanging mineral and royalty interests. New guides and insights are added as they are published.
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Heritage Investor Prospectus
Our current mineral and royalty offerings, tax considerations, and a mineral acquisition overview. Available to accredited investors; we confirm fit before sending.
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More guides and market insights will appear here as they are published. In the meantime, browse the glossary and the common questions below.
Reference
The mineral & royalty
glossary.
67 plain-English definitions for the terms you will run into on a division order, a lease, or a royalty statement. A quick reference whether you are buying, selling, or just making sense of what you own.
- Royalty Interest
- An interest in an oil and gas lease giving the owner the right to receive a portion of the production from the leased acreage, or the proceeds of its sale, generally without paying any portion of the cost of drilling or operating the wells.
- Division Order
- A schedule of owners and their decimal ownership share in the revenues from a well's production.
- Held By Production (HBP)
- A mineral lease provision that extends the right to operate a lease for as long as the property produces a minimum quantity of oil and gas.
- Overriding Royalty Interest (ORRI)
- A royalty in excess of the royalty provided in the oil and gas lease, usually added during an intervening assignment. ORRIs are created out of the working interest and do not affect mineral owners. They are often reserved by or assigned to a geologist, landman, or brokerage.
Frequently asked questions
The questions owners and
investors ask most.
What is the risk of owning royalties?
Royalty income is tied directly to a well's production and to commodity prices, both of which move over time. A property with established production history allows for more grounded projections, but income is variable and is not guaranteed.
Once I own royalties, are there any expenses, management fees, or maintenance?
No. After the initial purchase there are no ongoing expenses for the royalty owner. Drilling and operating costs are carried by the operating company and the working-interest holders.
What documentation do I receive when I purchase royalties?
You receive a mineral deed recorded with the county where the property is located, so your ownership is publicly documented.
How soon do distributions begin after purchase?
Timing depends on the operator's payment cycle and when your interest is set up in their system. The first distribution often arrives within a couple of months, and timing is not guaranteed.
Where does the revenue come from, and how often?
Distributions come from the operating company that markets the production, and are typically paid monthly.
Are there tax advantages to owning minerals and royalties?
Mineral and royalty income may qualify for tax treatment such as the depletion deduction, and exchanges into like-kind property can defer capital gains under Section 1031 of the tax code. Treatment depends on your situation, so consult your own tax advisor.
Who handles a 1031 exchange?
Your representative at Heritage will connect you with a qualified intermediary, who prepares the documents and handles the funds throughout the exchange.
How long does the 1031 exchange process take?
IRS rules give you 45 calendar days from the sale of your original property to identify replacement property, and 180 calendar days to close on it. Within those windows, the paperwork and transfer of funds can move quickly. These are general IRS deadlines, not tax or legal advice; work with a qualified intermediary and your own tax advisor.
Can I sell my royalties later?
Yes, producing interests can be sold, and there is a secondary market for them. Resale is not guaranteed, and the price and timing depend on market conditions at the time.
Who would I sell them to?
Heritage Land & Minerals can help you find a buyer for your mineral and royalty interests, though any sale, including its price and timing, is not guaranteed.
Why would anyone sell mineral rights if they are valuable?
Selling all or part of a position provides a lump sum of capital instead of waiting on long-term monthly payments. That can help fund further development, or give an owner cash for a larger purchase.
Investor voices
What investor partners say.
“I've worked with Don and his team at Heritage Land & Minerals on over five mineral properties. I've continued investing with them and have enjoyed how easy and straightforward they have made the process.”
Names abbreviated at investor request. Past performance is not indicative of future results.
Confidential Prospectus
Heritage Land & Minerals
Prospectus
Current offerings, tax considerations, and a mineral acquisition overview.
- Current mineral and royalty offerings
- 1031 exchange eligibility overview
- Tax considerations overview
- State-by-state field data
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Risk disclosure
Mineral and royalty investments involve substantial risk, including the loss of principal. Distributions depend on production volumes, commodity prices, operator performance, and other factors outside Heritage's control, and are not guaranteed. Mineral and royalty interests are illiquid; there is no public market for them, and resale, including its price and timing, is not guaranteed. Heritage Land & Minerals offerings are available only to accredited investors and only by means of a confidential prospectus that contains the complete risk disclosure. This website is not an offer to sell or a solicitation of an offer to buy any security.