What do you know about owning the mineral rights versus owning the oil and gas rights?

What do you know about owning the mineral rights versus owning the oil and gas rights?

I've been told there is a difference. On my property USX supposedly owns the mineral rights, but my neighbors tell me that I own the oil and gas rights. Can this be true?

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Permalink Reply by Nancy Mosley on August 4, 2011 at 4:20pm

What does your deed say? Does it say oil and gas? What state? How far back have you traced the title?

Might be different in some states. Sometimes when property is sold, the rights to the oil and gas (or even just oil) might be reserved. I have seen deeds where the oil and gas (or 1/2 of the oil and gas) is reserved, and a later deed says something about the oil, gas and minerals having been reserved to predecessors in title where the actual reservation is worded "oil and gas" . The information I have is for West Virginia. Of course sometimes "coal" is specifically mentioned and other times it is included in "minerals".

Permalink Reply by JMS on August 4, 2011 at 4:24pm

The property is in Butler County Pennsylvania.

I haven't checked the deed recently...just have had discussions with the neighbors who bought the properties in our area at the same time.  We all purchased a farm that had been divided into parcels about 40 years ago.

Permalink Reply by Nancy Mosley on August 4, 2011 at 4:27pm
It would be interesting to see what your deed says.
Permalink Reply by JMS on August 4, 2011 at 4:58pm
Ok, I checked the deed and it specifically says we do not own the coal rights.  No other mention is made of minerals, gas, or oil.  Thanks Nancy, for prodding me to pull out the deed and check it out! So... since nothing else is mentioned, does that mean we own the oil and gas rights?
Permalink Reply by Jim Litwinowicz on August 5, 2011 at 2:42am

In Pa, the deed reservation must state that oil and gas are reserved or the O & G rights stay with the surface rights owner. In other words, since your deed specifically states that the coal rights are reserved and doesn't mention oil and gas then you own the O & G.   Congrats!!!

 

The only other state that treats O & G this way is Louisiana, I think. In all other states, if the "mineral rights" are reserved, then it includes oil and gas.

 

I would suggest that you get together with your neighbors and form a small group and talk to an attorney to verify this as deed language varies over time and can be confusing. Of course, one of your neighbors may have already confirmed the deed language, if the language is identical to yours, and the gas rights.

 

Then you need to learn the issues and then start negotiating. 

 

Good Luck!

Permalink Reply by JMS on August 5, 2011 at 6:19am

Thanks for the info...that is VERY GOOD news!

Have also recently joined a landowners group that is working with an attorney and the group is in negotiations with the oil and gas companies. 

 

Permalink Reply by JMS on August 4, 2011 at 4:59pm

Is it necessary to trace the title beyond the 40 years we've owned this property?  How do I go about doing this?

Permalink Reply by Nancy Mosley on August 5, 2011 at 1:31am

I have read advice on this and other forums about tracing back to at least 1900. I have seen a deed from the 1890s where 1/2 of the oil, gas and other minerals were retained. Often, when there is not an active lease on a property people don't think about what they own. A lot of deeds just grant "all the interest of the grantor" in the property. Then you have to find out what that interest was.

About how to trace this, plan to go to the courthouse of your county. Probably the Clerk of Court's office or Register of Deed's office records the deeds. Somebody there can help you. The process is: find out who was the grantor on the deed when you purchased (the seller) and look him up in the index (that's where somebody in the courthouse can help). See what that deed says. If you and your neighbors all purchased from the same grantor, the size of the parcel will be larger than what you have. Then go back and see where that previous grantor got it. Sometimes there is an inheritance involved.

There are professionals who do this and you could ask about that at the courthouse if you need help. My sister is an attorney and she explained to me how to do this. It can get pretty complicated but often is very easy. I am still trying to get things traced for royalty rights we inherited, and have seen some interesting things, including how the interest "increased" over the years when people, maybe 50 years later, sold something with wording implying that they owned all the OGM (oil, gas, minerals) where I had a deed from 100 years ago where 1/2 of the OGM was reserved (later sold to my ancestor). I also want to know who owns the other part of our OGM, so there is a lot of tracing to do.

Maybe this information is available online for your county.

Have fun!

Permalink Reply by JMS on August 5, 2011 at 6:16am

Thank you for this great explanation...looks like I will need to take a day off work and do some research!

Permalink Reply by Nancy Mosley on August 5, 2011 at 6:22am
If you discover anything interesting, let us know. You'll learn a lot. And the more you know the more seriously the landman will take you in leasing discussions.
Permalink Reply by JMS on August 5, 2011 at 6:23am
Another great point...thanks Nancy!
Permalink Reply by Jim Litwinowicz on August 5, 2011 at 6:49am

Landmen do searches back to 1850 which is before the first oil well at Drake's Well. Whomever you sign with will do a full search again before you get paid the bonus.

 

And make sure that your lease does not require you to warranty the lease. That should be the company's responsibility. (Actually, the title company hired by the gas company)

 

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