The Basics Of Ownership Of Oil And Gas Mineral Rights

Typically in the excitement to buy a piece of property, particularly in an area without current or past oil, natural gas, or mineral production, the thought of including the oil and gas mineral rights as part of the sale is often overlooked.

Some people also assume that the oil and gas mineral rights are automatically included with the property, which may or may not be the case. It can get very complicated even with land changing hands only a couple of times since ownership was established to determine who actually has the rights or if they are with the property itself.

Severing Mineral Rights and Surface Estate

It is generally understood that when you buy property, at least in the United States, you own the surface of the land as well as the air directly above it. In some cases, if the transfer of the deed to the property includes mineral rights, or in some states it has to say specifically oil and gas mineral rights, the property owner is also the owner of the oil and gas rights, and can lease or sell them as he or she chooses.

In many cases somewhere in the history of the transactions of the land, either through inheritance, gifting or selling, the mineral rights were not included or were purposely excluded by one of the owners. In this case that person, or his or her heirs, are the actual owners of the mineral rights even though you own the surface estate.

Isn’t that Trespassing?

In a situation where another person or entity owns the oil and gas mineral rights and you own the surface estate (the property), drilling can happen even if you may not be in agreement. However, it cannot, under U.S law, interfere or damage any part of your home or improved areas of the property.

In most situations owner of the oil and gas mineral rights can also create roadways and complete improvements necessary to drill or to mine. They can only do this on areas of your property they own the mineral rights for, and in some cases the minerals may be specified within the mineral deed. This is important in states that use the Dunham Rule, specifically Pennsylvania and Ohio, where the deed must state “oil and gas” in addition to mineral to be able to drill for either.

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