In Texas, can an oil or gas company drill on my land? What to know about mineral rights
Because Texas land is abundant with oil, natural gas and various minerals, owning Texas property with mineral rights is extremely important and valuable.
While buying Texas land with minerals and other natural resources can be a profitable venture, mineral rights laws can leave property owners confused about ownership and access rights.
What are mineral rights and who has them?
Mineral rights — “the rights to mineral deposits that exist under the surface of a parcel of property,” per the Watson Law Firm in College Station.
While those rights normally belong to the owner of the estate, in Texas they can be transferred through sale or lease to a second party. Having a clear understanding of who has rights to minerals below the surface helps avoid disputes and complications, the Watson Law Firm says.
There are five components to ownership of mineral rights, according to ONDA Family Law:
the right to have access to the property to exploit the minerals,
the right to execute a mineral lease, called the executive right,
the right to receive a bonus payment for signing a lease,
the right to receive delay rentals when drilling does not commence by a specified deadline
and the right to receive royalty payments for minerals removed.
Mineral estate — “any minerals contained within that land, below the surface.”
Ownership of the surface estate, the visible land at the surface, does not guarantee rights to the mineral estate below the surface. Mineral estates typically are passed to the owner of the surface estate, but it is possible for landowners to sell the surface estate while retaining ownership of the mineral estate.
“In Texas, the mineral estate is a separate interest in land that can be severed from the surface estate. The severance generally occurs in one of two ways,” a report from the Texas Real Estate Research Center says. “Either the landowner sells the minerals and retains the surface, or more commonly, the landowner sells the surface and retains the minerals. If the seller fails to reserve the minerals when selling the surface, the buyer automatically receives any mineral interest the grantor owned at the time of conveyance.”
Mineral conveyance — “the mineral rights were transferred to you as part of a sale,” per Pheasant Energy in Fort Worth.
Mineral reservation — “signifies that the former owner still owns the mineral rights even after selling the property.”
The mineral estate owner can lease their rights to companies that extract minerals from below the surface, which often requires access through the surface estate.
You can go over the property deed to see if it includes mineral conveyances or reservations. You can also search for mineral rights at the county clerk’s office in the county where the minerals are located, where they can provide data, documents and records of leases and deeds filed for mineral rights.
What to know about mineral rights in Texas when buying land
When buying land, it’s important that the mineral rights being sold with the property are actually owned by the person selling the surface estate, the Watson Law Firm says. The seller must own those rights in order to transfer them with the sale of the surface estate.
If mineral rights are not part of a sale, according to land.com, insisting on a surface waiver can eliminate problems with unwanted drilling and mining on the property.
When selling or leasing mineral rights, value must first be determined, which depends on variables including location of the land, minerals within the land, accessibility and proximity to other resources. The rule of thumb is that mineral rights are worth a multiple of three to five times the yearly income produced, so a mineral right that produces $1,000 a year in royalties would be worth between $3,000 and $5,000, according to the Law Offices of Mark Robinette.
Buying or leasing mineral rights also entails a contract detailing the way the resources may be accessed, how much disruption of the surface estate is permitted and who will pay for surface damage while digging for mineral resources.
Property owners and prospective buyers should discuss plans with mineral rights law firms to ensure they are getting what they believe they are purchasing, the Watson Law Firm suggests. They can determine who owns which estate, whether acquisition of deposits on owned land is legal and who is responsible for any damage caused during the process.
