When someone buys a house, he or she may assume the purchase price includes the land on which the house sits. They may also assume that the land they own includes both what is above the ground and what lies below. However, in Texas, this is not always the case. Additionally, even when someone’s ownership of the property includes the rights to whatever lies below, they may have the option of selling those rights.
In many parts of Texas, oil and gas development creates a lucrative opportunity for those who own mineral rights along with their property. If your company is interested in obtaining those rights, you would be wise to learn as much as possible about what is involved in your decision and the rights homeowners may exercise when leasing their mineral rights to you.
What can I do when I lease mineral rights?
By law, landowners may do whatever they want to their surface property in the interest of exploring, locating and producing any gas or oil underground. Obviously, not many average citizens have the know-how, the equipment or the financial backing to undergo such a project. For this reason, they may lease their mineral rights to your company so you can extract the product from the ground.
When property owners take this route, they will retain surface rights, but mineral rights trump surface rights. This means that if you have the right to the minerals, you may take any steps that are not negligent or excessive in order to extract and produce it, including the following:
- Conducting seismic testing, which may involve the use of dynamite
- Drilling numerous wells, which may involve erecting towers on the property
- Creating, maintaining and using access roads on the property
- Entering and exiting the sites of the wells as necessary
- Building pipelines from the wells
- Using water sources from either above or below the surface of the property
- Disposing of contaminated water
Of course, there is usually room in a contract for negotiating the use of the surface property, and the homeowner may wish to place restrictions on you. The more comprehensive your agreement with the property owner, the less likely you will end up in a legal dispute in the future. Additionally, the payment for the mineral rights is a subject of concern for many property owners, and there are several options that will benefit you while remaining fair to the property owner.
