Who Owns A Propertys Mineral Rights

One major reason rural land is gaining attention of investors is the boom being experienced in the oil and gas industry. Technological advances allow these companies to drill for oil and natural gas in areas that were once considered inaccessible. The “fracking” process creates cracks (fractures) in the shale rock, releasing the petroleum and natural gas that had been confined. The six shale “plays” in the United States include over nine million acres. It is possible that the acreage for sale that you purchase may be in one of those shale plays. Knowing who owns the mineral rights on a property is an important matter that should be addressed.

The Mineral Rights Come With the Land, Right?

No, mineral rights are not included with all parcels of land. Most states view a piece of land as having surface rights and mineral rights. In many cases, landowners have learned the hard way that they do not own the mineral rights. Special attention should be given to determine this ownership because many times it is overlooked. Otherwise, you may not find this out until there is no time or options to take positive action.

Before title to the land is passed, a title search is typically done on all properties. The purpose of this search is to make sure the land’s title is “clean,” meaning the seller does, in fact, own full interest in the surface rights to the property. A chain of title for mineral rights is not always done. You purchase the land believing you not only own the surface, but also what lies beneath. One situation that has happened to people and could happen to you is drilling equipment one day driven in on your property and you must allow them to do their work because you do not own the mineral rights.

How to Prevent This From Happening to You

Consider the area where the land is located. Is it remote land or country land? Is it undeveloped land? If so, ask your realtor or the owner if mineral rights are included or have been reserved. A mineral title search should be done for verification. You can also read the deed giving the current owner rights in the land for yourself since this is a public document available at the county’s courthouse.

Is there any mention of a “reservation” in the current owner’s deed regarding the mineral rights? If so, then the seller does not own the minerals rights or is limited to only a fraction of the rights. Also, look at what exactly is reserved. Mineral reservations can be for other things beside just ownership of the minerals. Reservations of royalties from the oil and gas sold, delay rentals, and defined bonuses.

Land is a stable investment and determining mineral rights ownership should be a priority when you consider buying acreage for sale. Having these rights, in addition to surface rights, could make you a wealthy oil and gas tycoon. And, identifying who is the mineral owner requires just a little additional research.

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