You own the minerals that are part of your land. It is okay to separate your surface estates (the property above the ground) and your mineral estates (the property below the ground). You can lease or sell your mineral estate to another party while maintaining ownership of the surface. You can lease or sell both estates to the same or separate parties. You also can sell the surface estate while retaining ownership of the mineral estate.
Disputes can arise when the surface and mineral rights are separated. Our Waco oil, gas, and mineral rights attorneys handle disputes involving Texas mineral rights’ ownership, leases, and royalty payments.
Leasing Mineral Rights
Leasing mineral rights is common in Texas. But it is not a simple process. As a property owner, you have the right to negotiate the terms of the oil and gas lease. You should talk with an oil and gas attorney if you are approached regarding an oil, gas, or mineral lease.
Voluntarily leasing of mineral rights is encouraged by Texas law. If an oil or gas producer can secure leases with a majority of landowners over a particular geographic reservoir, and only one or a few landowners refuse to lease their mineral rights, then the state’s compulsory pooling law may allow the producer to go ahead and drill the well. As a non-consenting property owner, you would be subject to a risk penalty.
Inheriting Mineral Rights
You might inherit a mineral estate. This can be a challenging process, especially if the inheritance was unexpected. It also can become more challenging as mineral rights are divided into a higher number of interests in each generation. This issue is known as fragmentation or fractionalization.
When you have inherited a small interest in mineral rights in Texas, you should talk with a lawyer about your options. Even a tiny portion of a mineral estate can be profitable. However, it also could be more trouble than it is worth, depending on your perspective. You may choose to sell or lease those rights to someone else.
If you inherited surface property in Texas, you should not assume you inherited mineral rights too. This can be a complicated question, and it depends on whether the surface and mineral estates were previously severed.
Rule of Capture
A Texas oil and gas law is the “rule of capture.” That rule says that a person owns any oil and gas produced from a well bottomed on their land, regardless of where the oil or gas originated, with a few exceptions. Negligent drilling that causes damage or destruction of a neighbor’s oil and gas is prohibited and can cause an oil and gas producer to be liable for their neighbor’s damages.
Texas has a compulsory pooling law. This allows operators that cannot obtain the mineral rights to all of the property over the geological reservoir to be still able to drill the well. Non-consenting property owners in both states can be subject to a risk penalty up to a certain percentage of the production costs. If you are dealing with a forced pooling, contact an oil and mineral rights attorney right away.
Waco Oil, Gas, and Mineral Lease, rights and Interests Attorney
If you have a legal question about an oil, gas, or mineral interest in Texas, then contact a board-certified real estate attorney like Dunnam & Dunnam in Waco. Vance Dunnam, Jr. engages in Real Estate Law practice and is certified as a specialist by the Texas Board of Legal Specialization in the practice of Residential Real Estate Law and Commercial Real Estate Law (certified since 1984 and 1985 respectively).