Is an Oil Company Eyeballing Your Land?

Posted by on May 13, 2015 in Gas and Minerals | 0 comments

Many landowners are rather uninterested in minerals and other related matters until they receive a notice of interest from an oil or gas company asking for lease on their mineral rights. Gas and oil companies ask for lease for mineral rights because of the possibility of finding gas or oil on your land. In order to “harvest” the gas and oil reserves, the company would have to secure an Oil, Gas and Mineral Lease from you, the property owner.

The way the Lease works is pretty straightforward. The property owner will be paid an up-front lease bonus together with royalty percentage on the value of production, in exchange of permitting the oil and gas company to drill and produce. Drilling often occurs, but there are some cases where drilling is not done until the lease merely expires. If you are trying to sell mineral rights, you have to also make sure that the owner of the surface rights is aware of your plans for selling or leasing.

There are instances where the surface owner is different from the mineral rights owner, so even if you lease your mineral rights, they may still have to ask permission from the surface rights owner to drill. This can be complicated, which is why before trying to sell mineral rights, you should also consider the surface rights owner, especially if the property rights have been severed. Any damage that is related to surface use is compensated. In order to avoid being cheated on your land is by hiring the help of professionals who can provide advice regarding sharing ownership and the significance of severed property rights.

In general, the mineral rights owner has more authority regarding the property, nevertheless the surface owner still have the right to prevent negligent and unreasonable use of their part of the land. Likewise, the mineral owner should adjust to any existing use of surface. In general, the surface owner has the right to ensure that the surface is not negligently used and existing use is effectively accommodated to minimize damages.

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