Trying to find a definitive update on whether land owner revenue resulting from the sale of water for fracking and/or drilling Salt Water Disposal wells must be shared with 50% going to the state on Relinquishing Act or Mineral Classified lands in Texas. Thanks in advance for the wisdom of the group!
It all depends on the particular facts and circumstances in the transaction. For example, if the SWD, a pipeline ROW, electric ROW or surface damages, etc. is related to the minerals and wells for the lease or unit, then all revenues must be shared with the State. If the minerals are not leased and not in process of being leased, such as ROW for large transmission line crossing the tract, then this is solely for the surface owner. State owns coal, lignite, sulphur, thorium, uranium, potash, and leasing is 60% to State and 40% to surface owners. If you are selling water to the lease operator, then you would have to share with state. You should discuss water with GLO to make sure about other water sales. You do not want to jeopardize any oil and gas royalties. These areas keep changing.
Thanks so much for your input. So to clarify (I’m pretty slow):
- If on a mineral classified property that I am leasing to an oil company that has production if I sell them water from that property for fracking, the revenue I receive from them must be split with the state?
- If I use the same property to drill SWD wells and I’m paid by the oil company I have to also split that revenue with the state?
If I contract with a third party to drill SWD wells for the oil company on that same property, do I have to also share that revenue with the state.
Thanks again for your help.