Minerals Seperate from Surface Ownership
In all states in the USA, mineral rights may be owned independently from surface rights. If an individual owns mineral rights to a tract of land, they are legally entitled to the minerals beneath the surface and may utilize the surface within reasonable perimeters to access the minerals underneath. This mineral ownership is called “Mineral Estate” aka, ‘mineral rights’, or simply ‘minerals’.
Developed by Energy Companies
Usually, in the case of petroleum, the exploration and development is delegated to energy companies. This arrangement has become standard as energy companies have the financial strength, technical knowhow, and risk mitigation methods to make the gamble on drilling for hydrocarbons.
Who has Title to the Mineral Rights?
However, before exploration can begin, ownership of the mineral rights must be determined. Mineral rights are verified through deeds. Sometimes discovering deeds that prove mineral ownership can prove difficult as transfer of ownership has not been diligently processed from generation to generation. In extreme cases, legal avenues must be pursued to establish mineral ownership. A landman, who could be described as a mineral rights paralegal, is normally employed to research and verify this information.
Lease Negotiated
Once mineral ownership has been determined negotiations for oil and gas lease can begin. Only a mineral owner may legally execute a legally binding agreement for oil royalties. Surface owners have minimal input in the negotiation of the lease. Surface owners are only entitled to the use of the surface of the land and not the minerals beneath. The surface owner can, however, negotiate for the damage that will be done in building the drilling pad.