Colrado Mineral Rights
Learn about mineral rights in Ohio, including the best counties, how to find your wells on a map, valuations, transferring ownership, paying taxes, and more.
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Colorado Mineral Rights
WV ranks #4 in the United States oil production and #8 for natural gas.
Top Producing Oil & Gas Counties in Colorado
Ohio has 64 counties, but only 15 of them produce a reasonable amount of oil and gas. However, the vast majority of the oil and gas is extracted from just three counties. Is your county one of them?
Value of Colorado Mineral Rights
The value of mineral rights in Colorado depends on a variety of factors, including location, production status, decimal interest, production volume, commodity price, lease development, lease terms, and the operator.
How to Locate Your Colorado Mineral Rights
Colorado provides an interactive map that allows mineral owners to locate their oil and gas wells to see production history and other basic details.
Transferring Ownership of Colorado Mineral Rights
It’s best to have an attorney help you transfer the ownership of CO mineral rights. Learn why.
Find Your Colorado Mineral Deed
Looking for proof that you own mineral rights? Follow these steps to search the deed records.
Sell Your Colorado Mineral Rights
Get an offer for your Ohio mineral rights. There is no obligation to sell, and it won’t cost you anything.
Top Oil & Gas Producing Counties in Colorado
Harrison, Carroll, and Belmont are the top producing counties for both oil and natural gas in Ohio.
Minerals in the far western part of the state have the most prolific wells, but we will buy minerals anywhere in Ohio as long as they have producing wells. These are the top-producing counties:
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NOTE: It is important to realize that, even in the top counties, there are areas of the county that produce large amounts of oil and gas but other areas that produce none. The location is very so important!
Niobrara Shale Play
Colorado is home to several significant shale formations, known for their oil and gas production potential. The two most prominent shale plays in the state are the Niobrara Shale and the Piceance Basin
Niobrara Shale
The Niobrara Shale primarily spans the Denver-Julesburg Basin which stretches across northeastern Colorado and into parts of Wyoming, Nebraska, and Kansas.
The play is known for producing both oil and natural gas, with a higher emphasis on oil in certain areas.
Operations in the Niobrara can be complex due to the geological variability across the play. The depth and thickness of the productive layers can vary significantly, affecting both the drilling strategies and the economic viability of wells.
Piceance Basin
Situated in northwestern Colorado, the Piceance Basin includes the Mancos Shale, which has significant depth and thickness, offering the potential for substantial gas resources.
Traditionally, the Piceance Basin has been known for its tight sand formations, but with advancements in drilling technologies, the focus has shifted somewhat to the deeper shale formations like the Mancos Shale.
The development of shale resources in the Piceance Basin has been closely tied to natural gas prices due to the high costs associated with drilling and completion in deeper and more complex geologies.
Image Description: Map of the Marcellus Shale formation overlapping Ohio, West Virginia, and Pennsylvania.
Colorado Mineral Rights Value
Oil and gas royalties and mineral rights in Colorado are valued differently if they are producing vs. non-producing.
Producing Mineral Rights Value
Producing minerals are mineral rights with an active oil or gas well that is producing economically viable quantities of oil or gas.
Modern Valuation Method
Modern valuation methods use data from royalty statements and public data sources to model future revenue based on recent and predicted future pricing scenarios. This method takes into account your decimal interest, production volumes, decline, deductions, and commodity prices. Most mineral buyers use this valuation method.
In the past, they used to use the Rule of Thumb, which is roughly 30 – 60 months of royalty revenue based on a variety of factors. This method is not suitable for new horozontal wells typically found in Western Ohio.
Non-Producing Mineral Rights Value
Non-producing minerals do not have a producing oil or gas well. Because there are no wells, there will be no royalty revenue.
Typically, non-producing minerals are valued based on a multiple of the expected lease bonus.
For example, if the going lease bonus in the county ranges from $100-$200, you can expect to sell your mineral rights for the lease bonus times the number of net mineral acres (NMA) you own.
The value of non-producing minerals is usually stated as a price per net mineral acre. The price per net mineral acre varies from state to state, county to county, and even within a county.
Interested in learning more about the value of your mineral rights? Check out this guide on 7 Factors That Influence the Value of Mineral Rights or this video about why Location is Everything (via YouTube).
Transferring Ownership in Colorado
The proper way to transfer title is by deed or court order (divorce, probate, etc.). In some cases, Colorado mineral rights may be semi-transferred with an Affidavit of Heirship (AOH), which allows the next generation to get into pay status with the operator, but can cause problems down the road if the title is not “marketable”.
You always want to have a “marketable title” to your mineral rights, so it’s worth doing the transfer correctly. It’s best to consult an Colorado oil and gas attorney and get professional advice on transferring mineral rights.
Not sure where to find a Colorado attorney? Google, “CO oil and gas attorney.”
I have a Deed/Document. What next?
Once you have a legal document conveying the mineral rights from the previous generation to you, you’ll need to have it recorded with the County Clerk and Recorder (in the county where the minerals are located). The mineral rights are not really owned until the document is recorded, so don’t leave it in a drawer – do it right away!
Notifying Operators
If there are producing wells, you will need to notify the operator about the change in ownership. Once your document has been recorded, send a copy to each operator. The operator will do some research and if everything checks out, they will probably send a division order and put you into pay status.
Need more help (transferring before/after death, after a divorce, or into/out of a trust)? Our detailed guide to Transferring Mineral Rights may help.
An alternative to transferring ownership is to sell your Colorado mineral rights, which might make sense if the interest is relatively small or the next generation is not interested in managing them.
Searching Colorado Deed Records
It’s a good idea to keep copies of deeds, division orders, royalty statements, and 1099 tax documents. The first step in being a responsible mineral owner is the know what you own so that it can be properly managed. There will come a time, when the minerals will need to be transferred to the next generation or sold.
It’s a good idea to keep a copy of your mineral deed (and the previous deeds) in your files. Non-producing minerals tend to be “out of sight, out of mind” and are easily forgotten. Having a copy of your deed will help prevent this from happening.
Fortunately, it’s easy to locate most mineral deeds and other title documents related to your mineral rights. Deeds are public records that are stored with the local county clerk and recorder.
Google search: [County Name] + “deed search”
Example: Weld County CO Deed Search
One of the top results should take you to the County Clerk and Register of Deeds and there will probably be a link to their online deed records.
Simply search the county records for your name and the names of the individuals from whom you inherited the mineral rights. Each county is different but most of the time, you can search for free, and documents can be purchased for a few dollars.
You might find conveyances, deeds, assignments, affidavits of heirship, lease memos, and other relevant documents.
If you’re thinking about your estate plan, you might find our guide, Four Things Older Mineral Owners Should Consider,” to be thought-provoking.
Image Description: Screenshot of Adams County’s online deed search.
Image Description: ODNR interactive oil and gas well map.
Locating Your Colorado Mineral Rights
Colorado’s ECMC provides an interactive map that allows you to locate their mineral rights on a map.
- Locate your tract of land
- Find any producing wells
- Find permits for new wells
- View surrounding wells
- View production history
Viewing your wells on a map can make them less abstract and as they say, knowledge is power. You can better manage your mineral rights when you know more about what you own.
Paying Taxes for Mineral Taxes in Colorado
All Ohio oil and gas royalty owners pay federal income taxes on their royalty revenue. The IRS allows royalty owners to deduct a 15% depletion on Federal taxes.
State Taxes
Royalty income is typically considered ordinary income for tax purposes. It is subject to Colorado’s flat state tax rate 4.55% on individual taxpayers.
Property Taxes
Ad Valorem Taxes are county taxes levied on mineral rights. Colorado is different than some of the surrounding states.
Non-Producing Mineral Rights
In Colorado, non-producing minerals may or may not be subject to Ad Valorem taxes.
Producing Mineral Rights
Producing mineral (with an active oil or gas well) are subject to Ad Valorum taxes, but typcially the opertor is responsible for paying the tax – not the mineral owner.
Not sure if your minerals are producing? Read more about producing vs non-producing mineral rights.
Image Description: Illustration of an oil pumpjack used on conventional (vertical) oil wells.
Colorado Mineral Right FAQs
Browse these frequently asked questions about CO minerals.
How do I know if I own mineral rights in Colorado
Let’s go over a couple of scenarios:
You purchased a home with a half acre of land
Most real property is sold through a standard real estate transaction which requires a title company to review the history of land. The title company probably knows if you own the mineral rights under your property. You can ask them (or it might be in your documents). You can also hire someone to do a title search (or try and do it yourself).
You now own the farm that has been in your family for generations.
You may or may not own the mineral rights. There is a significant chance that you do own the mineral rights, but you would have to do a title search to verify this. Trace the land ownership back to the original land patent, then trace it forward and look for any reservations or conveyances of mineral rights. Most people do not have the skills to do this, so you may need to hire a landman or an attorney.
What happens to dormant minerals in Colorado?
Colorado recognizes the mineral estate as dominant over the surface estate. This means that the owner of the mineral rights generally has the right to use the surface of the land as reasonably necessary to explore, develop, and produce the minerals beneath it. This dominance ensures that mineral rights owners can access their mineral resources, even if this usage impacts the surface estate.
Implications of the Dominant Mineral Estate in Colorado:
Access Rights: The holder of the mineral rights has the legal authority to enter the land and undertake activities necessary for mineral exploration and extraction. This can include drilling, building access roads, placing equipment, and other actions involved in resource development.
Surface Owner Protections: Despite the dominance of the mineral estate, surface owners are not without rights and protections. Colorado has developed regulations that require mineral rights owners to minimize disturbance and damage to the surface as much as possible. This includes providing reasonable notice to surface owners about planned operations and potentially negotiating compensation for damages that occur as a result of accessing the minerals.
Negotiations and Agreements: In practice, the relationship between surface owners and mineral rights owners often involves negotiations. Surface use agreements are commonly negotiated to define how mineral rights owners will access the property and what measures will be taken to minimize and remediate impacts on the surface.
I just inherited mineral rights. What should I do first?
Congratulations! Welcome to the club of 12 million mineral owners. The United States is the only country where mineral rights are owned by individuals, so it’s a special club.
The first thing you need to do is make sure the mineral rights have been transferred to your name. This process is not necessarily automatic, you may need to hire an attorney to probate an estate or draft mineral deeds.
If you have producing minerals (there are one or more wells on the property), you need to send your proof of ownership (usually a deed, divorce decree, or recorded probate documents) to the operator and ask them to transfer the ownership.
The operator will do their research, and if everything checks out, they will transfer the ownership to you. They may send a division order to make sure that both of you agree about the amount of interest you own.
Be sure you keep copies of all your mineral documents – they will come in handy later and help you effectively manage your mineral rights.
How do I sell Colorado mineral rights?
It’s easy to sell your CO mineral rights and it doesn’t cost you anything. Here is the basic process:
1. Request an offer. We’ll need to see your latest royalty statements. If you have more documents, such as deeds or 1099s, that’s great, but don’t worry if you have limited info.
2. We will give you an offer. You can decide if you want to accept it, look for competing offers, or reject it. Requesting an offer doesn’t obligate you to sell.
3. If you want to proceed with the sale, we will do a title search and draft the closing documents.
4. We will coordinate the closing process to meet both of our schedules. It is usually done remotely, but if you are in the DFW area, we can close in-person if you want.
What about anti-oil and gas regulations in Colorado?
Colorado has enacted stringent regulations aimed at protecting the environment while balancing the interests of the oil and gas industry. These regulations include rules on air and water quality, wildlife protection, and the requirement for operators to maintain a certain distance (setbacks) from occupied buildings and vulnerable areas, such as schools and water sources. For mineral owners, this regulatory environment means that while their rights to develop minerals are supported, the process involves navigating complex regulatory requirements that can affect the timing and feasibility of projects.
Furthermore, the interaction between state and federal regulations can add another layer of complexity, especially in areas where federal drilling bans or moratoriums are in place. Such bans often arise from broader environmental and public health objectives, such as preserving national forests, wildlife refuges, and other sensitive habitats. For mineral owners, these restrictions can limit access to their mineral resources on federally managed lands, impacting the economic value of their holdings.
Image Description: Conventional and unconventional (horizontal) oil and gas wells in Weld County, Colorado.
Where We Buy Mineral Rights
We buy both producing and non-producing minerals in all oil and gas states. However, we are especially interested in Texas and Kansas mineral rights.
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We even buy minerals in more obscure states, which produce very little oil and gas compared to other states.
How We Value Mineral Rights
There are many factors that play into the value of mineral rights. These include location, producing vs. non-producing properties, current oil and gas prices, well production figures, lease terms, and even the operator of the well or wells. We also look at the risks of buying and owning minerals that you are interested in selling.
Location
Minerals in the hottest shale plays are more valuable than those in older fields with conventional wells.
Producing vs. Non-Producing
Producing minerals are often worth more than non-producing minerals because they are generating revenue.
Oil & Gas Prices
When oil and gas prices drop, revenue drops, and sometimes operators are unable to continue operating the well.
Production
Highly productive wells (and off-set wells) can increase the value of your minerals.
Lease Terms
Favorable lease terms (such as a 25% royalty reservation) positively impact the value of the leased minerals.
Operator
A small number of operators are unethical, and their reputation automatically devalues your minerals.
Why Sell?
Why People Sell Their Mineral Rights
I am putting my affairs in order. I don’t want to burden my kids with the hassle of transferring ownership and managing small mineral rights. When my sister passed away, my niece and nephew had to hire an attorney to help them with the minerals. I don’t want my kids to go through that.
I inherited my mineral rights so they were sentimental, but I don’t really want to bother with managing them and filing extra tax returns. I decided to sell and use the money as a down payment on my house.
I had no idea how fast the oil production would decline. My checks are only 20% of what they were a few years ago. I should have sold my mineral rights when the wells were brand new and still generating huge royalties.
My oil wells have been producing for decades and the reserves are almost depleted. Once the wells are plugged, the value will be significantly lower. I’d rather cash out now.
I inherited mineral rights, but don’t want to be involved with fracking and fossil fuels. I would prefer to support renewable energy and do my part to reverse climate change.