Why the U.S. is different
The United States is one of the few major producing countries where most oil and gas rights are owned by private individuals and companies, not the government. For an international buyer, that single fact shapes everything: who you negotiate with, how you prove ownership, and what can go wrong after closing.
In most of the world, an investor deals with a national government or state oil company through a concession or production-sharing contract. In the U.S., the same well can involve dozens or hundreds of private owners, each holding a different slice of the rights, documented across a century of county courthouse records.
This guide walks through how a foreign company acquires U.S. oil and gas assets, from understanding what you are actually buying to managing the asset after closing. It is written from a land perspective: the ownership, title, and contracts that determine whether an asset is worth what you paid.
ValleyView Energy serves as the on-the-ground land team for international investors entering U.S. basins. This guide reflects what we see on every deal.
How U.S. mineral ownership works
Ownership of the land surface and the minerals beneath it can be separated. When they are, the minerals are a “severed” estate that can be bought, sold, leased, and inherited independently of the surface.
A mineral owner usually does not drill. Instead, they sign an oil and gas lease with an operator, keeping a royalty and receiving a bonus payment. That creates several distinct interests in the same tract:
| Interest | What it is | Pays drilling costs? |
|---|---|---|
| Mineral interest | Ownership of the oil and gas in place, including the right to lease | No |
| Royalty interest | A share of production retained by the mineral owner under a lease | No |
| Working interest (WI) | The right to explore, drill, and produce under a lease | Yes |
| Net revenue interest (NRI) | The working interest owner’s share of revenue after royalties | Yes, through the working interest it comes from |
| Overriding royalty (ORRI) | A royalty carved out of the working interest, ending with the lease | No |
What a buyer is really purchasing is a set of these interests across many tracts, often with different percentages tract by tract. The price depends on getting those percentages right, which is why title work sits at the center of every U.S. deal.
Also keep in mind that leases expire unless kept alive, usually by continuous production or drilling. A lease that has quietly lapsed is worth nothing, even if it still appears in a seller’s data room.
Choosing a deal structure
The right structure depends on how much control you want, how much operating capability you bring, and how much risk you will carry.
| Structure | What you get | Best fit for |
|---|---|---|
| Operated asset acquisition | Leases, wells, and the role of operator | Buyers ready to run field operations or hire a U.S. team |
| Non-operated working interest | A share of wells run by another operator | Investors who want exposure without running operations |
| Mineral and royalty interests | Royalty income with no drilling costs | Long-term, lower-risk income strategies |
| Corporate (entity) acquisition | The seller’s company, with all its assets and liabilities | Large platforms where the team and systems matter |
| Joint venture or drilling partnership | A funded share of a development program alongside an operator | Capital providers seeking growth with an experienced partner |
Most U.S. upstream deals are asset purchases rather than corporate acquisitions. An asset deal lets the buyer choose which leases, wells, and contracts to take, and leaves more historical liabilities with the seller. An entity deal is faster to close but brings everything the company owns or owes.
Many international entrants start with an operated platform plus a local management team, or with a non-op position alongside a trusted U.S. operator. Either way, the buyer usually forms a U.S. company to hold the assets (see the tax section below).
The acquisition process, step by step
A typical U.S. asset acquisition runs from first look to closing in roughly two to six months, depending on size and how clean the title is.
- Sourcing. Opportunities come through marketed sales run by investment banks and brokers, or off-market through direct relationships with operators and owners. Off-market deals often price better but need a trusted local network to find.
- Data room review and bid. The seller shares well data, lease schedules, and title information. The buyer’s land, engineering, and finance teams value the asset and submit a bid. A “smoking-gun” review at this stage looks for obvious problems, such as expiring leases or ownership gaps, before money is committed.
- Purchase and Sale Agreement (PSA). The PSA sets the price, the effective date, and the rules for handling title and environmental defects. Its title provisions decide how much protection the buyer really has, so they deserve close review.
- Title and environmental due diligence. Landmen and title attorneys check ownership in county records and prior title opinions, confirming the working and net revenue interests the seller claims. Environmental consultants review the condition of wells and facilities.
- Defect notices and cure. The buyer formally notifies the seller of title or environmental defects before a deadline. The seller can cure them, reduce the price, or exclude the affected interests.
- Closing. Funds move, assignments are signed, and the price is adjusted for revenue and costs since the effective date.
- Post-closing settlement. Typically 90 to 180 days after closing, the parties true up the final numbers and transfer any remaining records.
Where ValleyView helps: we run smoking-gun reviews before you bid and manage title diligence and defect notices through closing, so problems surface while you can still negotiate.
Regulatory and legal considerations for foreign buyers
Most foreign investors can own U.S. oil and gas assets, but a few federal and state rules decide who can buy, how the deal must be structured, and what must be filed. Check each one with U.S. counsel early, before signing a PSA.
National security review (CFIUS). The Committee on Foreign Investment in the United States can review foreign acquisitions of U.S. businesses, and its rules have long named major energy assets as a focus. Filing is voluntary for most upstream deals, but scrutiny rises when the buyer is controlled by a foreign government, takes control rather than a minority stake, or acquires assets near military installations or critical infrastructure. CFIUS has cleared large foreign energy deals before, sometimes with conditions.
Federal onshore leases. Leases on federal land, common in New Mexico’s Delaware Basin, are governed by the Mineral Leasing Act of 1920. Foreign citizens can hold interests in federal leases through stock in a U.S. company, as long as their home country grants Americans similar rights. In practice, buyers hold federal leases through a U.S. entity.
State land-ownership restrictions. Texas Senate Bill 17, effective September 1, 2025, bars individuals and entities tied to designated countries (currently China, Iran, North Korea, and Russia) from acquiring Texas real property, which includes mineral rights. It does not restrict investors from other countries, and it has been challenged in court, so confirm its current status. Many other states have similar laws.
Operator registration and bonding. To operate wells, a company must register with the state regulator, such as the Railroad Commission of Texas (RRC) or the New Mexico Oil Conservation Division (NMOCD), and post financial assurance covering future plugging obligations. Federal wells add Bureau of Land Management (BLM) bonding. Build these approvals into the closing timeline, because the operator change cannot complete without them.
Tax and entity structuring basics
U.S. tax law treats oil and gas interests as real property, so the holding structure should be set before closing, not after. This section flags the issues to raise with a U.S. tax advisor; it is not tax advice.
FIRPTA. Under the Foreign Investment in Real Property Tax Act, an interest in a U.S. mine, well, or other natural deposit counts as a U.S. real property interest. When a foreign person later sells one, the buyer generally must withhold 15% of the amount realized. That shapes your exit as much as your entry.
A U.S. holding company. Most foreign buyers acquire through a U.S. entity, often a corporation or LLC formed in Delaware or Texas. A U.S. entity simplifies operator registration, federal lease eligibility, bank financing, and dealings with counterparties used to U.S. companies.
Income from production. Revenue from operating or working interests is usually taxed as U.S. business income. Royalty income paid directly to a foreign owner can face withholding unless a treaty or election applies. The right answer depends on your home country’s tax treaty with the U.S.
Bring tax advisors in at the bid stage. The structure can change how much you can afford to pay.
After closing: making the asset yours
Closing transfers ownership on paper; the first six to twelve months decide whether the asset performs. International owners without a U.S. land team are most exposed here.
- Record the assignments in every county where the assets sit, so public records show you as owner.
- Change the operator with the state regulator and, for federal wells, the BLM.
- Transfer division orders so purchasers of oil and gas pay you, and royalty owners keep getting paid correctly. Errors here create owner complaints and suspended revenue.
- Load the land system with every lease, contract, and ownership interest, tied to maps (GIS) so your team can see what you own.
- Track lease obligations such as continuous drilling clauses, shut-in payments, and expirations, which can cost acreage if missed.
- Cure remaining title issues before they block a new well or a future sale.
Owners who keep clean records from day one sell faster and at better prices later, because the next buyer’s diligence goes smoothly.
Where ValleyView helps: we handle operator transitions, division orders, and land administration for international owners who don’t have a U.S. land team.
Common mistakes international buyers make
- Trusting the seller’s ownership numbers. The data room shows what the seller believes it owns. Independent title review often finds a different net revenue interest, and every decimal changes value.
- Treating title as a closing formality. In the U.S., title diligence is where price is protected. Weak defect provisions in the PSA leave the buyer paying for problems found later.
- Underestimating lease expirations. A lease held by a single marginal well can lapse when that well stops producing.
- Setting the structure too late. Tax, CFIUS, and state-law questions answered after signing can force costly restructuring.
- Planning only to closing. Without a transition plan for division orders, operator changes, and land systems, revenue can be suspended and owners frustrated in the first months.
- Going without local relationships. The best assets often trade off-market, between parties who already know and trust each other.
How ValleyView Energy helps international investors
ValleyView Energy is a full-cycle land management firm based in Fort Worth, Texas, with a team drawn from operators including XTO Energy, Apache, Parsley Energy, BPX Energy, and Luxe Energy. We have supported more than $10 billion in A&D transactions across major U.S. basins.
For international buyers, we act as the land team on the ground at every stage:
- Before the bid: sourcing on- and off-market opportunities and running smoking-gun reviews.
- Through closing: title and PSA advisory, defect notices, and cure coordination.
- After closing: operator transition, division orders, land systems, GIS, and ongoing administration.
- Alongside your advisors: working with your U.S. legal, tax, and engineering teams so land findings feed directly into price and structure.
Evaluating a U.S. acquisition? Schedule a conversation with our team. We’ll walk through your target basin, likely title risks, and how we’d support your deal from bid to long-term ownership.
This guide is general information, not legal or tax advice. Laws and regulations change; consult qualified U.S. counsel and tax advisors about your specific transaction.