Surface Rights vs. Mineral rights

Oil and Gas Leasing Help
#1

I have property in Texas near Houston which we hold the mineral rights to. We sold the property to a company who uses it for storage. There are about 9 wells on the property all of which are abandoned except 2. The company who has had the mineral lease(on adjacent tracts) is using the storage tanks for salt water and the well head of another to use as a injection well to get rid of the salt water from several other tracts (which we do not own). The oil co. have not signed a new lease with us and say we have no rights to the tanks, well head etc. that they belong to the owner of the land now and we are out of luck. Is this true that they can use our property and we no longer own it? If we lease to another company who has priority? I thought mineral rights won out over surface rights.

Thanks

#2

Minerals produced from under the property are the only things you retain rights to. Since you sold the surface you have no claim on anything on it. As I understand it the surface owner normally receives “damages” for the use of a well on their land for salt water disposal. Flooding is also one method of increasing production of a well in some cases. The still operating wells may be benefiting from the salt water injection. If you lease to a new company, they have the right to drill a new well. You still have the right to produce your minerals.

#3



r w kennedy said:

Minerals produced from under the property are the only things you retain rights to. Since you sold the surface you have no claim on anything on it. As I understand it the surface owner normally receives "damages" for the use of a well on their land for salt water disposal. Flooding is also one method of increasing production of a well in some cases. The still operating wells may be benefiting from the salt water injection. If you lease to a new company, they have the right to drill a new well. You still have the right to produce your minerals.
#4



Kathleen Johnson said:

So if we want to lease to another company and they want to rework #7 and #8 to see if they will produce again, we are out of luck because the surface owner is using them for salt water (really the oil company) If we drill a new well or use the existing one for gas do we have any rights? Sounds like we don't have anything left really. I guess I can check the paperwork on the sale and see if we retained anything. My mom will be turning over in her grave, as will my granfdather.

Thanks for your help.



r w kennedy said:
Minerals produced from under the property are the only things you retain rights to. Since you sold the surface you have no claim on anything on it. As I understand it the surface owner normally receives "damages" for the use of a well on their land for salt water disposal. Flooding is also one method of increasing production of a well in some cases. The still operating wells may be benefiting from the salt water injection. If you lease to a new company, they have the right to drill a new well. You still have the right to produce your minerals.
#5

There should have been wording in the lease, that the lease terminates after an indicated period without production and with no reworking being done in a specified period of time in an attempt to produce. This does not apply if there is a shut in clause and the operator pays the shut it royalty.

#6

I don't really understand any of that...Sorry. Just frustrating because they are using our equipment to for the salt water disposal for leases of other people around our tract that are producing and we get nothing since we don't own the property anymore...just the minerals. Without the use of this salt water disposal NONE of the other fields could produce.

Again, thanks for your help. I'lll look for the sale contract

r w kennedy said:

There should have been wording in the lease, that the lease terminates after an indicated period without production and with no reworking being done in a specified period of time in an attempt to produce. This does not apply if there is a shut in clause and the operator pays the shut it royalty.
#7

Remember, if you had active wells at one time your water was probably going down someone elses old well.

#8

Hi Kathleen,

My experience comes as a rancher/landowner in Wyoming. Wyoming law is probably not the same as Texas law, but I'll take a shot at an explanation. The legal standing of the mineral estate being dominant over the surface estate only goes so far as to surface activities that are necessary to produce the minerals. If the minerals have been produced out, the well bore is abandoned (either plugged or converted to a disposal well) and the lease may or may not (depending on lease language/pugh clause) be released. If the equipment is not being used to produce your minerals, you probably don't have a claim to the surface activities. If you re-lease to another company, that company would probably have to drill a new well rather than use the old well bore.

#9

Hi Kathleen, If your land was all leased at the same time and was considered,one tract,and there are still two wells producing,as you stated, the Co,that leased it holds it as long as there is production,and this can be a very small amount,gas or oil. As far as the tank batterys and old wellhead is concerned, the oil co. owns them unless, you had working interest in the operation to begin with,none the less the oil co still holds controling interest and you,don`t have much say in the matter. sorry, I know this can be very painful to here,but thats the way it can be sometimes. Cal Hopper

#10

Are you receiving royalty at all? Even a check once a year? If not then I don’t think you are in the producing pool and your lease has expired.

#11

We have not had royalties in a while. The Oil Co. leased from us apparently to use one of our old wells as a Salt water Disposal. They said they were going to rework it and take the gas out…NOT. I will check on our terms of sale. I am sure my mom used a lawyer and I would hope they would have included some clause to keep what they could. I’ll check on that or just wait for the gas…I imagine this and the next generation will get nothing and it will be the grandkids who finally see the gas production. Thanks for all the hlep. You live and learn.

r w kennedy said:

Are you receiving royalty at all? Even a check once a year? If not then I don't think you are in the producing pool and your lease has expired.
#12