What Is The Difference Between Mineral Rights and Leased Mineral Rights?
The difference between ownership of mineral rights and leasing of mineral rights is one that often confuses landowners and even lawyers.
The ownership of the minerals beneath your land is usually part of your ownership of the land as a whole. Thus, the oil, gas, coal and other minerals under the land are generally owned by the owner of the surface land, just like the timber on the land. However, in some cases, the ownership of the mineral rights—or a part of them—has been “reserved” or “severed” from your ownership by a previous owner. When this happens, that other person, their heirs or people that they have sold these rights to may own the minerals under your land. Oftentimes, you are not aware of this because the reservation occurred decades ago. Even if you had title insurance or an attorney’s certificate of title when you bought the land, that search may not reveal mineral rights ownership. The only way to be sure of who owns your mineral rights is to have a mineral rights title search or abstract done.
The owner of the mineral rights has the right to lease them. Mineral rights are usually leased to an oil or gas company that drills a well to bring the oil and gas to the surface for marketing. But it is the owner of the mineral rights who has the right to collect any royalties from the oil and gas produced.
We have talked with many landowners who say, “I was told when I bought this land that the mineral rights would transfer to me.” That statement may or may not be true. The only way to be sure is to have your land examined by a mineral rights title search.
We are happy to help you determine who owns the mineral rights under your land and advise you about your options.