350 Neb. Admin. Code, ch. 13, § 001

Current through September 17, 2024

Section 350-13-001 - DEFINITIONS

001.01 Mineral

Mineral shall mean an inorganic substance found naturally in the earth, including, but not limited to ore, gravel, oil, or natural gas.

001.02 Mineral interest

Mineral interest shall mean the ownership of any minerals, mines, quarries, mineral springs, overriding royalty interest, and production payments with respect to oil and gas leases. The interest includes the executor rights to sell or lease the property, to receive bonus payments and delay rentals and to participate in the production through royalty payments.

001.02A A producing mineral interest shall be the interest created in a mine, quarry, mineral spring, or oil or gas wells at the time it has come into production and for which production payments are being made or received. Most mineral leases have a term specific until the property subject to lease is made to produce a specific mineral. These leases may be extended for as long as the lessee recovers the mineral subject to the lease in paying quantities.

001.02B A non-producing mineral interest is one in which there is no known activity related to the recovery of a mineral. A mineral lease commonly allows for a bonus rental and delay rentals to be paid to the lessor unless and until the lessee is able to extract in an economically feasible manner the specific mineral subject to the written agreement or lease.

001.03 Mineral lease

Mineral lease shall mean a written agreement under which the owner of the mineral interest grants the lessee the right to use the land for mineral exploration. Production may be divided into royalty interests, overriding interests, and working interests.

001.04 Overriding royalty interest

Overriding royalty interest shall mean a given percentage of the gross production at the surface carved out of the working interest.

001.05 In regard to oil, gas and petroleum production leases, royalty interest

In regard to oil, gas and petroleum production leases, royalty interest shall mean a share of not less than 12.5 percent of either the gross production or the market value of such gross production at the leased premises. Such royalty is paid to the owner-lessor of the mineral interests.

001.06 Severed mineral interest

Severed mineral interest shall mean a mineral interest in which ownership of the mineral interest is different from that of the surface interest.

001.07 Unit

Unit shall mean any single oil, gas, or other hydrocarbon well or any other mineral well or field, which has multiple ownership or any combination thereof, consolidated into a single operation.

001.08 Well

Well shall mean an orifice in the ground made by drilling, boring, or in any other manner from which any mineral is obtained or obtainable or which is being made for the purpose of obtaining minerals.

001.09 Working interest

Working interest shall mean the remaining percentage after royalty interests and overriding royalty interests. Such working interest is commonly 87.5 percent ( 87.5 %) or less and belongs to the lessee and others involved in the production in regard to oil, gas and petroleum production leases.

350 Neb. Admin. Code, ch. 13, § 001