What You Need to Know About Oil and Gas/Mineral Rights on Your Land

Oil and gas are the most common minerals that bring value to property in Texas. However, the definition of a mineral is broader than oil and gas and can include uranium, sulfur, lignite, coal, and any other substance that is ordinarily and naturally considered a mineral. 

What is an oil and gas lease or a mineral lease? 

It is an agreement between the owners of the mineral estate (or mineral interests) and a producer or operator. In exchange for compensation specified in the lease, the lessee is given the right to search for, develop, and produce the oil and gas or minerals. Commonly, the industry states that the lessee “works” or “operates” the interest leased because he performs the work. The lease can encompass the right to work all the minerals or only those specified in the lease(e.g., limited to oil and gas). 

What is a mineral interest? 

Briefly, a mineral interest is part of the ownership rights related to owning real property. The owner of the mineral estate typically holds the right to search for, develop and produce minerals from the property. A mineral interest can be severed from the surface rights and can be sold or leased separately from the surface once it is severed from the surface. Usually, the owner of the mineral estate holds the right to use the surface to the extent that is responsibly necessary to extract the minerals (implied easement). Just as one may have multiple owners of the surface, there may be multiple owners of the mineral interests. Each mineral interest hold may have different rights. The holders of the minerals interests together own the mineral estate. 

What is an executive right? 

Typically, the executive right is the power to lease the minerals. Many times, it is severed when the mineral estate is sold to multiple parties. For example, if a person sells half of the mineral estate to another, the seller may decide to retain the power to lease the entire mineral estate at his discretion. Under this example, the other mineral interest owners would not be able to participate in the decision to lease the minerals. 

If you have any further questions make sure you consult your lawyer or real estate agent. If you need help finding a property with mineral rights included, contact our team today and let us help make all of your real estate goals come true!