Mineral rights and the interest in them have been central to the plot of many a movie and book and for good reason.
Mineral rights can be one of the most complex inheritances for an heir, often due to their value, be it perceived or in black and white.
If a deceased loved one has left a will, the executor of the will may transfer mineral rights to heirs, making it possible to mine or sell resources yourself or enter into a mineral rights lease so others can remove them.
A title search should be done to confirm mineral rights ownership as mineral rights are frequently separated from surface in real estate transactions. This search will also determine the percentage of rights owned. If there is a current lease in place, the executor can transfer the interest in the lease to the heir so royalties are paid to the new owner.
If an owner splits mineral rights between heirs, the fragmented mineral rights may be owned by siblings or, if heirs sell or transfer mineral rights, the heirs may not even know one another. Oftentimes, oil companies will contact heirs when rights are transferred, and that transfer becomes record in the county where the rights are located.
If a landman contacts a new mineral rights owner to propose a new lease, it could be time to contact an attorney with experience in oil and gas leases. The landman, or representative of an oil company, often has information regarding the value of other surrounding rights, drilling history, future plans, and a general knowledge of the business many mineral rights owners without expertise rarely possess. An attorney can guide lease discussions and can help new owners avoid common mistakes, like a contractual clause to automatically renew a lease without renegotiating its value. An experience attorney can also study the county records to determine the mineral interest and check the Oil and Gas Conservation Commission website to determine the wells that have been drilled adjacent to the mineral interest. Information can be pulled from the website such as a drilling history, permit status, production records, and electric logs with various other information. A review of the county records will also reveal the companies that have entered into oil and gas leases in the area that may be candidates to take a lease from a mineral owner.
An experienced attorney can be a boon if mineral rights owners wish to sell their mineral rights. A landman is often tasked with providing accurate information to all parties, negotiating terms, and protecting the good reputation of the industry, but legal representation can help an owner navigate the valuable rights underfoot.