If you own mineral rights in the Permian Basin — whether you inherited them from a parent or grandparent, or bought them years ago — you're sitting on top of one of the most actively drilled rock formations in the world. The Wolfcamp Shale runs beneath millions of acres in West Texas and southeastern New Mexico, and right now, major oil companies are spending billions of dollars to develop it. That activity directly affects what your mineral rights are worth.
This article is written for people who are curious about their options, not ready to make any fast decisions, and want straight answers. By the time you finish reading, you'll understand what the Wolfcamp Shale actually is, why it produces so much oil, which counties and sub-basins are seeing the highest values, what your mineral rights might realistically be worth, and what to watch out for before you sign anything.
We'll cover Texas and New Mexico specifically, since those two states contain the Permian Basin, and the rules — from property taxes to severance taxes — are different in each one.
What the Wolfcamp Shale Actually Is — and Why It Matters to You
The Wolfcamp Shale is a thick sequence of rock that sits roughly 6,000 to 14,000 feet underground across the Permian Basin. It's not a single layer — it's divided into four main intervals, called benches, labeled from top to bottom as the Wolfcamp A, B, C, and D. Each bench is its own productive zone, meaning an operator can drill multiple horizontal wells through the same piece of land at different depths.
This concept — drilling multiple zones from a single surface location — is called stacked-pay development. Think of it like a tall apartment building versus a single-story house. The same footprint of land can support far more production when you have multiple productive floors stacked on top of each other. In the Wolfcamp, that can mean four, five, or even six horizontal wells drilled through your acreage at different depths, all producing oil and gas simultaneously.
Why does this matter to you as a mineral owner? Because stacked-pay potential is one of the biggest drivers of per-acre value. A section of land (640 acres) with demonstrated Wolfcamp A and B production — and geologic potential for C and D — is worth dramatically more than a section with only one productive bench. When mineral buyers or operators evaluate your acreage, they're thinking about how many wells can ultimately be drilled. More wells means more royalty checks for you if you hold, or a higher lump-sum offer if you sell.
The Midland Basin vs. the Delaware Basin — Location Changes Everything
The Permian Basin is actually two distinct sub-basins separated by a central platform. On the east side is the Midland Basin, covering counties like Midland, Martin, Howard, and Dawson in Texas. On the west side is the Delaware Basin, covering counties like Reeves, Loving, Ward, and Lea and Eddy counties in New Mexico.
Both sub-basins contain the Wolfcamp, but the rock looks different in each one, and production results vary. Here's what that means practically:
Midland Basin: The Wolfcamp A and B benches are the workhorses here. Pioneer Natural Resources (now merged with ExxonMobil following their 2023 acquisition) has drilled thousands of wells across Midland and Martin counties. Diamondback Energy is also a major operator in this area. Well results in Midland and Martin counties are among the most consistent in the entire Permian — operators know exactly what they're getting, which translates to strong, predictable mineral values. Net royalty acres (NRAs) — a standardized way of measuring what a mineral owner actually receives after accounting for their royalty fraction — in Midland County have sold for anywhere from $15,000 to over $40,000 per NRA depending on location, lease terms, and how much existing production is on the acreage.
Delaware Basin: Reeves and Loving counties in Texas are some of the most active in the entire country. Occidental Petroleum (Oxy) and ConocoPhillips both operate heavily here. The Delaware Wolfcamp tends to be thicker and in some areas more oil-rich than its Midland Basin counterpart, though geology can be more variable. The stacked-pay opportunity in Loving County is particularly pronounced — some operators are targeting six or more benches including both Wolfcamp and Bone Spring formations. NRA values in Reeves County have ranged from $8,000 to $25,000 in recent transactions, with Loving County values often higher given the intensity of development.
If you're not sure which basin your acreage sits in, look at the county. Midland and Martin counties are Midland Basin. Reeves and Loving counties are Delaware Basin. New Mexico acreage in Lea and Eddy counties straddles both basins depending on the specific township and range.
What Your Mineral Rights Might Actually Be Worth
This is the question everyone wants answered, and it deserves a real answer — not just "it depends." It does depend on several factors, but here's a grounded framework.
Mineral rights are typically valued on a per-net-royalty-acre basis. A net royalty acre (NRA) accounts for both the size of your mineral interest and the royalty fraction you're entitled to under any existing lease. If you own 20 acres of minerals under a lease with a 1/4 (25%) royalty, you own 5 NRAs. If your lease is at 1/5 (20%) royalty, you own 4 NRAs from that same 20 mineral acres. The distinction matters enormously — a higher royalty fraction means more NRAs and a higher total value.
In the active Wolfcamp counties today, here are realistic price ranges based on recent market activity:
- Midland County, Texas: $20,000–$45,000 per NRA for acreage with active production or a recently drilled well nearby
- Martin County, Texas: $15,000–$35,000 per NRA — strong market, consistent operator activity
- Loving County, Texas: $18,000–$40,000 per NRA — high-intensity drilling, multiple operators competing
- Reeves County, Texas: $10,000–$28,000 per NRA — wider range due to geographic variability within the county
- Lea County, New Mexico: $12,000–$30,000 per NRA in the most active areas near the Texas border
- Eddy County, New Mexico: $8,000–$22,000 per NRA depending on proximity to active development
These are 2024 market figures and they move with oil prices. At $75–$80 per barrel WTI (West Texas Intermediate, the benchmark price for U.S. crude oil), the ranges above are reasonable. If oil drops to $60 or climbs to $90, values shift accordingly.
The single biggest variable — bigger than county, bigger than basin — is whether there's a producing well on your acreage right now. Producing minerals generate royalty income immediately and are valued like an income-producing asset. Unleased or non-producing minerals are speculative and priced lower. If you're receiving royalty checks today, expect offers substantially higher than the per-NRA ranges above for comparable non-producing acreage.
Key Operators and Why They Matter to Your Decision
Knowing who's operating in your area isn't just trivia. The operator — the company that drills and manages the wells — determines how fast your acreage gets developed, how efficiently wells are run, and ultimately how much royalty income flows your way over time.
ExxonMobil / Pioneer Natural Resources: ExxonMobil's 2023 acquisition of Pioneer created the largest Permian operator by far, with Pioneer's legacy Midland Basin acreage now under one of the world's most capitalized companies. For mineral owners in Midland and Martin counties, this is significant: ExxonMobil has stated publicly it plans to dramatically increase Permian production through 2030 and beyond. More wells drilled, faster, means more royalty income for holders — and higher valuations for sellers.
Diamondback Energy: A Midland-headquartered company that is one of the most efficient drillers in the basin. Diamondback operates heavily in Midland, Martin, and Reeves counties. Their low cost structure means they can profitably drill even if oil prices soften, which provides stability for mineral owners in their operating areas.
Occidental Petroleum (Oxy): Oxy is one of the largest Delaware Basin operators and has significant presence in Reeves and Loving counties. Their acquisition of CrownRock in 2024 added more than 94,000 net acres in the Midland Basin, making them a larger force across the entire Permian. For mineral owners in Oxy-operated areas, the company's financial commitment to Permian development is a positive signal.
ConocoPhillips: A major operator in the Delaware Basin, particularly in Reeves County and New Mexico. ConocoPhillips operates with a long-term development mindset and has been increasing its Permian footprint. Their acquisition of Marathon Oil in 2024 extended their position further.
If you know who operates on your land, you can look up their investor presentations online to see their drilling plans. Companies like ExxonMobil and Diamondback publish multi-year development schedules. If they show inventory in your county, that's meaningful.
Texas vs. New Mexico: What Mineral Owners Need to Know About Each State
These two states have very different rules, and the differences affect both how much you keep from royalty income and how mineral rights are taxed and sold.
Texas:
Texas has no state income tax, but mineral royalty income is subject to federal income tax. Royalties are ordinary income and taxed at your marginal federal rate — for most people in their 60s with other retirement income, that's somewhere between 22% and 32%.
If you sell your mineral rights, the proceeds are generally treated as a capital gain. If you've owned the minerals for more than a year (which is almost always the case for inherited rights), you pay long-term capital gains rates — typically 15% or 20% at the federal level, plus the 3.8% Net Investment Income Tax if your income exceeds certain thresholds. For inherited minerals, your cost basis is stepped up to the fair market value at the time of inheritance, which can significantly reduce your taxable gain.
Texas does levy a property tax on producing mineral interests. This is assessed county by county and is based on the productive value of your wells. Non-producing minerals are generally not taxed in Texas. If you're already receiving royalties, expect a tax bill — but it's usually modest relative to the royalty income itself.
Texas severance tax on oil production is 4.6% of market value. This is deducted before your royalty is calculated, so it reduces your net check slightly but is not something you pay separately.
New Mexico:
New Mexico is more complex. The state has a personal income tax, with rates ranging from 1.7% to 5.9% depending on your income level. Royalty income earned from New Mexico minerals is subject to this state tax in addition to federal taxes — even if you live in Texas or another state. You'll need to file a New Mexico non-resident tax return if you receive royalties from New Mexico acreage.
New Mexico also has an Oil and Gas Severance Tax and an Oil and Gas Conservation Tax, which together amount to roughly 3.75% on oil production. These are also deducted before your royalty is paid.
For mineral sales, New Mexico requires buyers to withhold a portion of the sale proceeds for non-resident sellers — typically 5% — which is credited against your eventual New Mexico tax liability. Make sure any purchase agreement you sign accounts for this correctly.
One important New Mexico-specific issue: the state has ongoing discussions about post-production cost deductions, and the rules around what operators can legally deduct from royalties before paying you are somewhat different from Texas. If you're receiving royalties from New Mexico minerals and something looks off, it's worth having a royalty audit done before you sell.
What to Watch Out for Before You Sign Anything
Most mineral owners who get burned don't get burned by outright fraud. They get burned by agreeing to terms they didn't fully understand — and then finding out later that the deal wasn't as good as it looked.
Here are the things that actually matter:
Understand what you own before you negotiate. Do you know the exact legal description of your minerals? Your county, survey or section, township and range? Do you know whether you're currently leased — and if so, at what royalty rate? Buyers will know all of this before they call you. You should too. Your county's appraisal district or assessor's office is a good starting point, and in Texas, the Texas General Land Office and county deed records are public.
Don't conflate surface rights and mineral rights. If you inherited land, you may own the surface and the minerals, or just one of the two. These are separate property interests. Selling mineral rights does not affect your right to use the surface (in most cases), and selling surface does not convey mineral rights unless the deed explicitly says so.
A higher offer isn't always better. Some buyers quote high numbers contingent on title confirmation — then after due diligence, they reduce the price citing title defects, unleased acreage, or depth limitations in your existing lease. Ask upfront whether the offer is firm or subject to title review, and what specific conditions could reduce it.
Get multiple offers. Mineral buyers know your property value better than almost any other counterparty you'll deal with. The only reliable way to know if an offer is fair is to have competing offers. One phone call from one buyer is not enough information to make a decision.
Consult a CPA before you close. The tax consequences of a mineral sale — especially if your minerals have appreciated significantly since inheritance — can be substantial. A CPA who works with oil and gas clients (not just a general tax preparer) can model the after-tax proceeds for you and help you decide whether selling all, part, or none of your interest makes the most sense.
If you'd like to know what your Wolfcamp minerals might be worth today, we can help you get a real number — not a range from a brochure, but an actual offer based on your specific acreage. When you reach out, a real person — someone who has worked in Permian Basin mineral acquisitions for years — will call you back, typically within one business day. They'll ask you a few questions about your acreage, explain what they're seeing in the market for your specific county, and give you an offer or a realistic range. There's no obligation to sell, no pressure, and no cost. You'll walk away from that conversation knowing more than you do right now, regardless of what you decide.