The capital expense connected to the maintenance and drilling of new wells comes from the publicly traded and wall-street-based operator. The relationship between the landowner and the drilling operator is the drilling operator or wall-street based operator incurs 100% of the drilling expense and liability. The landowner is rich in land with oil and gas minerals and enters a contract agreement otherwise known as a lease agreement allowing the drilling operator access to drill on the land.
So, the landowner gets a free ride, so to speak, and a certain percentage of the revenue stream goes to the landowner free and clear of expenses for allowing the use of the land. A typical lease agreement would allow the landowner somewhere between 20% to 25% royalty interest R.I, the remainder would go to the drilling operator for putting up the capital and assuming the liability. This is the side of the equation that Ranger Land and Minerals places buyers of oil and gas royalty properties so that no expenses are ever required.