Do You Own the Oil and Gas Minerals Under Your Land?
- Craig Kaiser
- Jan 15
- 3 min read
Key Takeaways:
Mineral rights can be owned separately from surface rights, creating distinct surface and mineral estates.
A property's first sale can result in the severance of mineral rights, a process documented in the deed.
Determining mineral ownership is complicated and requires thorough research of historical deeds and records.
An example illustrates how mineral rights can become fragmented, with 16 individuals owning a small interest in a single tract.
Identifying all mineral owners is essential for agreements such as oil and gas leases, which can be time-consuming and costly.
Do I Own the Minerals Under My Land?
Let us start with a few basics! It is quite common to have different owners of the surface and mineral rights. By default, mineral rights are transferred with the land in a property conveyance- unless an owner or seller separates them at some point. An owner can split the mineral rights from the land by:
Conveying (selling or otherwise transferring) the land while retaining the mineral rights: This is accomplished by including a statement in the deed conveying the land that reserves all rights to the minerals to the seller.
Conveying the mineral rights and retaining rights to the land: In this case, the seller will issue a separate mineral deed to the purchaser of the mineral rights.
Conveying the land to one person and the mineral rights to another.
Because land sellers can only transfer what they actually own, once mineral rights have been separated, any future sale of the property will include only the surface land. A Mineral Deed is the document used to transfer ownership in real property. If you find the following language in the Deed, the minerals have now been severed from the surface: Notwithstanding anything contained herein to the contrary, Grantor reserves all of Grantor’s right, title, and interest in and to all the oil, gas, and other minerals in, on and under the described lands, including any and all royalties, bonus payments, delay rentals and other payments due and payable under any existing or future oil and gas lease (the “Mineral Rights”).
Deeds created after the mineral rights were first split typically won’t mention that those rights are excluded. As a result, you usually can’t tell from your deed alone whether you own the minerals beneath your land, and many owners are surprised to learn that someone else holds those rights.
Surface vs. Mineral Ownership
Surface ownership is much easier to determine than mineral ownership. As an example, surface owners pay property taxes. You can go to the county clerk’s office, county tax assessor website, or other databases to determine who is paying taxes and owns the surface.
Mineral ownership is much more complicated. Using the example below, the minerals were severed from the surface in 1905 when the Clampetts sold the surface to Mr. Drysdale. Not certain how many times the surface was sold after 1905, but to locate a mineral reservation, you would have to research the county records and read every deed with the same property description. It might take a title attorney or land professional 2 weeks to finally locate the 1905 deed and realize the minerals were severed from the surface.
Now, here is where it gets really complicated. In the example below, the minerals under the 640 ac ranch are currently owned by 16 different people. In most cases, when someone dies, 50 % of their real property is passed to the surviving spouse and the remaining 50% is split up between the children. For the ease of this example, assume each child had 2 children and both parents passed at the same time. Generally, an attorney specializing in the laws of descent and distribution would be required to accurately determine mineral title ownership.
Very seldom will a title attorney or a land professional be able to locate documents in the county courthouse that sets out how many children were born to a couple. It will take a tremendous amount of time and money to eventually identify these 16 people who each own a 6.25% interest in the 640-acre tract.
If an oil company wants to drill a well on the 640-acre tract, they will need to identify and locate each of the 16 oil and gas mineral owners and get them to sign an oil and gas lease.
If you own surface or mineral rights, you can get a free property report by finding your parcel on LandApp's map to learn how much it could be worth to sell or lease to an oil & gas company. Learn more about the potential value of your property and get started below:
