How to seperate your mineral rights from your surface Title?

I already know the obvious answer is get and attorney or hire a Land Title co. I am just asking for anyone's experience in this matter. I may need to sell my land and retain my mineral rights.

I have 160 acres in 4 separate 40 acres parcels side by side. equaling about 1/2 mile by 1/2 mile surface area. It could be sold by individual PARCELS. I really need to sell at least one of the parcels in order to retire due to health reasons.

I would sell the entire 160 acres outright without the mineral rights if I could keep a 99 year lease on the 5 acres in the middle of the property that I live on.

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I will answer any serious replies to this matter.

Bruce,

Without knowing where your 40's are located but with knowledge of El Paso Minerals, I suggest that you

  1. Consider holding the 40 with developed and adjudicated water rights which may be the one you live on.
  2. Consider how you may benefit from from grazing leases or subsidies in your lifetime and the best locations for that income to be generated.
  3. Think about who will benefit from the minerals rights over the long term. Nothing big will happen soon but the Niobrara may be developed eventually. Don't let the minerals be fractionated in the future if you can help it.
  4. Based on 3. consider transferring mineral rights into a long lived entity while there is no tax value
  5. List the surface to be sold or if you have a buyer in hand, demand that the buyer come up with a sale agreement that acknowledges the retention of the mineral rights, developed water rights, access thereto, perpetual support of permeability enhancement, rights to develop minerals under existing regulations, etc

When you get a contract in hand, then you need the help of a mineral lawyer to make sure you are getting what you want for 3. above before you sign a deed. In short, plan the sale of the surface for the short term and the minerals and water for the long term. Save one 40 for uncertainties and be careful not to lease your minerals away forever.

Thankyou Gary; I leased my mineral rights with an automatic option to renew? Did I already lease them forever?

Gary L. Hutchinson said:

Bruce,

Without knowing where your 40's are located but with knowledge of El Paso Minerals, I suggest that you

  1. Consider holding the 40 with developed and adjudicated water rights which may be the one you live on.
  2. Consider how you may benefit from from grazing leases or subsidies in your lifetime and the best locations for that income to be generated.
  3. Think about who will benefit from the minerals rights over the long term. Nothing big will happen soon but the Niobrara may be developed eventually. Don't let the minerals be fractionated in the future if you can help it.
  4. Based on 3. consider transferring mineral rights into a long lived entity while there is no tax value
  5. List the surface to be sold or if you have a buyer in hand, demand that the buyer come up with a sale agreement that acknowledges the retention of the mineral rights, developed water rights, access thereto, perpetual support of permeability enhancement, rights to develop minerals under existing regulations, etc

When you get a contract in hand, then you need the help of a mineral lawyer to make sure you are getting what you want for 3. above before you sign a deed. In short, plan the sale of the surface for the short term and the minerals and water for the long term. Save one 40 for uncertainties and be careful not to lease your minerals away forever.

Gary L Hutchinson

Minerals Management

It depends on where the minerals are located. If they are spaced in one of the wells drilled last year, they may be tied up for a long time. If the lease has been sold to a large company that wants to hold, the lease may be extended. If you took one of the "standard" lease forms offered in the past couple of years, hope that the lease is not extended. "Friend" me and send my your legal descriptions and I will let you know what I think.

Gary Hutchinson

Bruce Goodall said:

Thankyou Gary; I leased my mineral rights with an automatic option to renew? Did I already lease them forever?

Gary L. Hutchinson said:

Bruce,

Without knowing where your 40's are located but with knowledge of El Paso Minerals, I suggest that you

  1. Consider holding the 40 with developed and adjudicated water rights which may be the one you live on.
  2. Consider how you may benefit from from grazing leases or subsidies in your lifetime and the best locations for that income to be generated.
  3. Think about who will benefit from the minerals rights over the long term. Nothing big will happen soon but the Niobrara may be developed eventually. Don't let the minerals be fractionated in the future if you can help it.
  4. Based on 3. consider transferring mineral rights into a long lived entity while there is no tax value
  5. List the surface to be sold or if you have a buyer in hand, demand that the buyer come up with a sale agreement that acknowledges the retention of the mineral rights, developed water rights, access thereto, perpetual support of permeability enhancement, rights to develop minerals under existing regulations, etc

When you get a contract in hand, then you need the help of a mineral lawyer to make sure you are getting what you want for 3. above before you sign a deed. In short, plan the sale of the surface for the short term and the minerals and water for the long term. Save one 40 for uncertainties and be careful not to lease your minerals away forever.