The exploration and production of minerals, especially oil and gas, are a very important part of the Texas economy. Therefore, it is important for you to understand the basics about your ability to participate in or have any control over mineral exploration and production on your new property.
The first thing you need to understand is that in Texas, the mineral estate is separate from the surface estate. In other words, a seller who also owns some or all of the minerals may separate that mineral estate from the surface estate in the sale of the property. And the rule in Texas is mineral owners dominate surface owners. This means that a mineral owner, or lessee, can enter the property to extract the minerals without obtaining permission from the landowner. Thus, if minerals belong to another person, a landowner has little control over oil and gas drilling.
What is considered a mineral in Texas? The Texas Supreme Court decided that oil, gas and uranium are minerals. However, limestone, sand, surface shale, caliche, building stone, gravel and water are not. Also, coal, lignite and iron ore are not considered minerals if they lie on (or within 200 feet of) the surface and the production of the substance will destroy or deplete the surface.
How do you know if the mineral estate is available? In this day and age in our area, the likelihood of getting any portion of the mineral estate is very unlikely, as most were severed from the surface many years ago, probably before the current owner purchased the property. But you never know, so the first step would be to determine what percentage, if any, of the mineral estate is available. To do this, we would start with reviewing the property’s title policy. Although it will not provide the exact status, it may give you some insight as to any prior reservations of the mineral estate. Another option, which is the most accurate, would be to hire a “landman” who specializes in searching mineral ownership. This is expensive and time consuming, and most sellers will not allow you to tie their property up while you make the determinations.
What are your options? You could take the position that you will not buy a property in Texas unless you get the mineral estate as well, but you may be looking a long time and probably never find that perfect property in the perfect location with the mineral and surface estates united and a seller willing to let the minerals convey. A more realistic approach would be to look for a property that fits your wants and needs, and if any portion of the mineral estate transfers upon conveyance of the property to you, that’s just icing on the cake. You can always make it a term in the sales contract that the seller’s interest in the mineral estate, if any, shall convey with the property. Although a seller can’t convey what they don’t own, if they do own some, they may be willing to part with their interest to make the sale. Also, if a seller fails to reserve their minerals, you will automatically receive the interest owned by them at the time of the property’s conveyance to you.
We understand that mineral rights can be a confusing issue if you are moving to Texas from a non-mineral state. Therefore, if you have concerns or questions, we recommend that you buy some time with an oil and gas attorney and get those worries addressed before you buy.
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