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Details matter in mineral rights contracts

Whether you are the owner of land in California or the representative of a company interested in accessing the resources that may lay below the surface of a particular piece of property, it is important for you to understand how agreements between these parties may work. When entering into any contract involving the rights to a mineral, whether rock, oil or something else, great care should be taken to identify the fine details in order to prevent future disputes.

As explained by Geology.com, a mineral rights contract may be structured in a number of ways. One option is to establish a lease that grants access to the land for a limited period of time. The intention here is that a company can use this time to explore and test the viability of any resource presence and production opportunity during this time. At the end of the lease period, they may pursue a purchase or walk away and all rights then return to the land owner.

Another option is an outright purchase. This, however, does not mean that production would commence immediately. It may take decades before this happens. It is therefore essential that the contract stipulate how a mineral rights owner may access the land and the resources beneath the surface. 

If you would like to learn more about details that are important in contracts between land owners and those interested in accesssing potential resources from the land, please feel free to visit the mineral and surface rights page of our California oil and gas law website.

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