How Do Mineral Rights Work in Texas?
Natural gas, oil, and other minerals are abundant on Texas soil. When owners of residential properties in rural and suburban regions in Texas learn that oil and gas operations are taking place nearby, the common question is, “how do mineral rights work in Texas?”
In Texas, estimating the value of mineral rights can be challenging. Since the state’s recognition and the adoption of its first constitution, Texas strongly focuses on the value of a property’s mineral rights.
The influence on the value contributes to a wide range of aspects. An individual must first identify the sort of land they own. After which, they can evaluate the value of their mineral rights in Texas. These regulations can be confusing or overwhelming for property owners.
What Are Mineral Rights?
In Texas, the rights to mineral reserves refer to the rights to what is beneath a piece of land. A property’s “mineral rights” are ownership of the mineral reserves under the surface.
The owner of the surface estate may have ownership rights to the minerals. However, in Texas, individuals can assign rights to another person. Texas allows for the sale or lease of these rights to a third party. However, this right often belongs to the surface estate owner, especially in the case of a unified estate.
Awareness of mineral rights requires understanding the distinction between the mineral estate and surface estate. The two estates are distinct from one another. Through these estates, individuals can buy or lease mineral rights.
Mineral and Surface Estates
To further understand the answer to the question ‘how do mineral rights work in Texas,’ it’s important to know the difference between mineral and surface estate.
The surface and mineral estate are two separate sets of estates that come with property ownership in Texas. The same individual can own these two estates and sell one or both of them to another party.
However, different parties in many parts of Texas now control mineral and surface estate separately. The surface estate is the land that is visible at the surface. Any minerals in that area below the surface are a part of the mineral estate.
When an owner sells the surface while keeping all or some of the minerals, this is known as “severing” the mineral estate from the surface estate.
An owner’s mineral estate is automatically a part of the sale if they do not specifically restrict the transfer of ownership to the “surface alone” or explicitly keep the minerals while selling the surface.
How Do Mineral Rights Work in Texas?
The Permian Basin has prolific oil and gas deposits in the United States. It is dispersed throughout Texas and New Mexico.
Even though a significant portion of the property is currently held by oil and gas companies, there are still several locations owned by individuals and corporations that may have oil and gas reserves.
The rules governing mineral rights can be complex, making property owners uncertain about their ownership and access rights.
The history of Texas mineral rights dates back to when the Mexican and Spanish flags governed Texas. Even the 1869 and 1876 state constitutions mention Texas’ mining rights. Mineral rights can be separate from surface rights under current Texas law. Additionally, an individual can sell or transfer it as a distinct entity.
In Texas, two-thirds of the counties generate oil or gas for the owners of the corresponding mineral rights. The Texas law maintains that the mineral estate is dominant, regardless of whether the surface estate and the mineral estate have the same or split ownership.
Accordingly, the mineral estate owner can freely use the surface estate to the degree logically required for developing, exploring, and producing the oil and gas under the property.
A business or person who has a mineral lease from the true owner of the mineral estate may utilize this right to freely exploit the surface estate for the benefit of the mineral estate.
The owner or a production lease with an oil and gas firm can use the Texas mineral rights directly. When a property has mineral resources, it is vital to talk about these concerns with knowledgeable oil and gas attorneys or mineral rights law companies.
Royalty Interest in Oil And Gas Leases
A royalty stake in oil and gas leases is the most typical way to invest in mineral assets in Texas. Like stock dividends, individuals will get a percentage of the production’s earnings as a stream of royalties as the owner of a right to royalties in a mineral estate.
However, lessees do not grant additional ownership rights, including the power to sell or lease the underlying mineral rights. The practice of paying out royalties in large amounts is typical in Texas.
How To Know Who Owns Mineral Rights of Your Property?
Now that you know the answer to, “how do mineral rights work in Texas?” here is how you can find out who owns the mineral rights of your property.
Sometimes, the transfer of mineral rights to the seller is incorrect, even if the transaction includes it. The deed might not mention that a former owner may have prevented the transfer of a parcel’s mineral rights.
Unfortunately, deeds frequently omit crucial information or contain it incorrectly. The federal General Mining Law, which permits the sale of mineral rights individually to people or businesses, further complicates this situation.
This issue should be treated very seriously if you are wondering how to obtain mineral rights to your land. It can be difficult to understand Texas mineral rights regarding land ownership.
Furthermore, it is customary in Texas today for a former surface owner to have reserved the mineral rights in a previous property sale. Going through the county records might be tough if you are not aware or good at property research.
The chain of title includes the history of a property’s transfers. You can trace back the initial owner of the land to the current owner.
Texas’s land records are difficult to access, especially for property deeper into the countryside. A person must search through Texas’ “grantor/grantee” databases to locate the appropriate deed.
Once the user locates the first accurate deed, they must return to the index to locate the second exact deed, and so on. Evaluate each deed to determine the special rights given.
Conclusion
There are many nuances to how mineral rights work in Texas, so it’s crucial to consult with an expert. Mineral rights in Texas are supreme over surface rights and can be sold or leased separately from the land. Owners typically receive royalties for the minerals extracted based on the lease or agreement.
