Bonus
An up-front, one-time payment made to a mineral owner in exchange for signing an oil and gas lease. Usually quoted per net mineral acre.
B
D
Division Order
A document that states each owner's decimal interest in production proceeds from a well. Operators use division orders to determine how to pay royalty owners.
H
Held by ProductionHBP
A lease clause that keeps an oil and gas lease in effect as long as the well is producing in paying quantities. The lease does not expire as long as production continues.
L
Landman
A professional who manages the acquisition of mineral rights, leasehold interests, and rights-of-way. Landmen research title, contact owners, negotiate deals, and manage lease obligations.
Leasehold
The interest created when a mineral owner signs an oil and gas lease with an operator. The leasehold holder has the right to develop the minerals for the term of the lease.
M
Mineral Rights
The ownership rights to the underground resources — oil, gas, coal, minerals — beneath a parcel of land. Mineral rights are distinct from surface rights and can be owned separately.
N
Net Mineral AcresNMA
The number of mineral acres a person owns in a given tract, calculated by multiplying their ownership fraction by the total surface acres. NMA is how mineral rights buyers quantify the size of a deal.
Net Revenue InterestNRI
The owner's share of production revenue, after all royalties, overrides, and burdens have been deducted. A working interest owner's NRI is their percentage of the oil and gas revenue they actually receive.
Non-Participating Royalty InterestNPRI
A royalty interest that does not share in bonus, rental, or lease execution — the holder only receives royalty on production. NPRI owners have no right to sign a lease.
O
Operator
The company responsible for drilling, completing, and producing a well. The operator files permits with the TRRC, pays royalties, and manages the physical operations on the lease.
Overriding Royalty InterestORRI
A royalty interest carved out of the working interest. ORRIs terminate when the underlying lease terminates. Often created as compensation for landmen, geologists, or prospect generators.
P
Permit
Official approval from the Texas Railroad Commission (or other regulator) to drill a new well. Permits are public record and are the leading indicator of future production — Scout's free Permit Tracker pulls them daily.
Pooling
Combining two or more mineral tracts into a single drilling and production unit, usually to form a standard unit size that can be efficiently drilled by a single wellbore.
Purchase and Sale AgreementPSA
The contract that governs the sale of mineral rights, royalty interests, or leasehold from a seller to a buyer. A properly drafted PSA is the single most important document in a mineral acquisition — Scout auto-generates them from owner records.
R
Royalty Interest
A non-operating interest entitled to a fraction of production revenue free of production and operating costs. Royalty owners bear none of the costs of drilling, completion, or operations.
S
Section
A 640-acre parcel of land used in the U.S. Public Land Survey System. In the Permian Basin, tracts are commonly described by their section, township, and range.
Severance
The legal separation of mineral rights from surface rights. Once minerals are severed, they can be sold, leased, and conveyed independently of the surface estate.
Shut-In Royalty
A payment made by an operator to keep a lease in effect when there is a producing well that has been temporarily shut in (not producing). Shut-in royalty payments substitute for actual production to maintain the lease.
T
Term Assignment
An assignment of leasehold rights for a limited period, after which the rights revert to the original holder. Often used to front-end drilling commitments.
Title Opinion
A legal opinion from a title attorney confirming who owns the mineral rights (and leasehold) in a given tract. Title opinions are used to verify ownership before drilling or acquisition.
Tract
A parcel of land identified for mineral ownership or leasing purposes. Usually described by a legal description, acreage, and location (section, township, range).
TRRCTexas Railroad Commission
The state agency that regulates oil and gas operations in Texas — permits, production, plugging, and environmental compliance. All Texas drilling permits are filed with the TRRC.
U
Unit
A group of leases or tracts combined for efficient development of oil and gas. Production is allocated to each tract based on its proportionate share of the unit.
W
Working InterestWI
An interest in an oil and gas lease that entitles the holder to a share of production in exchange for paying a share of the costs. Working interest owners bear drilling, completion, and operating costs.
Put these terms to work.
Scout is built around the way landmen actually work — NMA, NRI, HBP, PSAs, and everything else in this glossary.