We own mineral rights in Texas and they are leased up for one more year. We do not own the surface rights.
I was wondering if it is possible for the oil company to lease mineral rights without leasing the surface rights. If so, what could be some reasons why?
Yes, the oil company can lease the mineral rights without leasing the surface rights. This is a common practice in the industry. Both the minerals and surface a separate properties and is treated as such. Now, if a well is drilled, the oil company will deal with the surface owner for issues such as roads or surface damages related to the well. This is usually done by a written agreement between the surface owner and the oil company. All you do as a mineral owner is to negotiate the lease and hope a good well is drilled.
Thanks for the reply Mr. Mallory,
Are you saying the oil company can do a seismic, build roads, location and drill a well before leasing surface rights? Would a surface lease be on record somewhere?
I'm saying that the oil company does not lease the surface rights, instead, generally has a written agreement with the surface owner for any surface damages. It's not like an individual who leases the surface rights in order to grow crops or run cattle.
Ok, I understand now.
Thanks again, very helpful
I have never seen an Operator lease somebody's surface or buy somebody's minerals, just lease their minerals.
I thought we did back when we owned the surface. The surface owner leases the land beneath the road and location for the life of the well. The surface owner won'tbe able to farm that anymore. Maybe I'm wrong.
A 1 mile long road 25' wide comes out to be about 3 acres , not counting the location itself. Our place had at least two miles of roads. Surely a surface owner would lease that out?
I'm not so sure my first response went through, so here it is again ...
Mineral leases "trump" surface leases. The attachment may explain more details.
Thank you for that Ms. Malone. I just thumbed throught it and looked interesting. I will read it it later.
I understand what you mean by "trump". A land owner cannot keep a mineral owner from his or her minerals.
But it seems to me an oil company cant deprive a landowner of his land either. An example, maybe a little far fetched, would be 40 acre spacing on 640 acres. Thats 16 well locations with roads in between.
In fact the mineral lessee does not have to pay surface damages to the surface owner in most situations, but usually does to avoid a fight. They usually sign a surface use agreement with the surface owner.
My concern is that the surface owner would give the oil company so much grief that they might put our minerals on the back burner and go after something easier.
I don't trust the surface owners at all. They jacked my mother-in-law out of her surface rights with an unbelievably low dollar per acre deal. Classic case of taking advantage of the elderly. Thankfully, she retained the mineral rights.