Arkansas Mineral Rights

Arkansas Mineral Rights

Under Arkansas State Law, mineral rights override surface rights. Therefore, the surface owner must allow a portion of their land to be used for the development and production of minerals. The Lessee has the authority to explore the property for minerals even if the surface owner objects. The amount and type of compensation to the surface owner is negotiable strictly between the Lessee and the surface owner. If no mutual

agreement can be reached, the surface owner has the right to seek relief from the court system. The only guaranteed protection under Arkansas State Law is returning the surface to a reasonable condition after the drilling has been completed.

The primary term of a lease usually lasts 3-5 years, allowing the Lesse to explore for mineral resources. Several components of the primary term include:

  • Held By Production: If successful well is drilled and production has occurred, the lease is automatically
    extended, as long as royalties are paid to Lessor.
  • Shut-In Royalty: If successful well is drilled but not yet produced, the lease will remain valid if a yearly shut-in royalty is paid to the Lessor.
  • Royalty Payment: Under Arkansas State Law, the royalty payment is 1/8th, unless unless a higher rate was agreed upon in the lease negotiation.