Oil gas rights vs mineral rights

I just had a offer to sell a piece of land and I retain the  oil / gas rights while giving the buyer the mineral rights . Will I have any issues / downfalls in the future with my gas rights ? Thanks for all replies . Joe 

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Permalink Reply by Dexter Green on April 22, 2015 at 2:33pm

Can you be more specific about what it is that you're keeping and selling?  Are you retaining the royalties from oil and gas production but selling the mineral (i.e. executory) rights?

Permalink Reply by Ralph cramdon on April 22, 2015 at 2:49pm

I have 36 acres on the market . I had a offer today that I would retain the 'oil and gas rights ' , but the mineral rights would go to the buyer . 

Permalink Reply by Dexter Green on April 22, 2015 at 3:03pm

That is somewhat unclear.  Mineral rights generally refer to all minerals.  I suppose this means the buyer gets rights to coal or any other mineral that is not 'oil and gas' but I'm not sure that this is how I would word an offer.  What is the price differential between the list and the offer?  In other words, how much is the potential buyer valuing the mineral rights, minus oil and gas?

Permalink Reply by Jim Litwinowicz on April 22, 2015 at 4:04pm

I'm guessing he is in Pa where oil and gas rights are treated as different than Mineral rights.

Permalink Reply by Dexter Green on April 23, 2015 at 3:12am

That would explain a lot.  I admit I was thinking of this as an Ohio issue.

Permalink Reply by Jack Young on April 22, 2015 at 4:09pm

The important thing, wherever you are, is to work out what you and the buyer want to accomplish and then let a qualified local attorney draft the language required to make that happen. You don't need to understand it all yourself, fortunately.

Permalink Reply by Ralph cramdon on April 23, 2015 at 12:15am

The land is just north of the PA border , in NY . 

 The original deal included ' mineral , oil and gas rights " , the buyer came back with his wishes to get the mineral rights , and allow me to continue to own the Oil / Gas rights , with no change in the offering price . 

 I guess what I am asking is this . Would my oil / gas rights be affected if I did give away the mineral rights, but kept the oil gas rights ?  Thanks again for all your responses . Joe 

Permalink Reply by Fred Flintlock on April 23, 2015 at 2:02am

Oh, don't worry. You'll be long gone before NY allows extraction of the minerals.

Permalink Reply by Frank Walker on April 23, 2015 at 2:17am

Joe I'm confident you can understand this is a confusing situation, especially in light of the fact your property is in New York.  Are you today aware of any valuable minerals on or beneath your land, aside from oil and gas?  Are there special rock formations?  Is there gold or silver where you are (would be shocked but only trying to ferret out what's going on)?  Does your land possibly contain formations, which could be mined, of semi-precious stones?

Bottom line:  Can you account for, or provide us an explanation for, such a request by your potential buyer?  I'm not able myself to figure it out. 

Permalink Reply by Ralph cramdon on April 23, 2015 at 2:25am

There are no active mineral mines in the area , in fact its residential with lots that seem to run in the 30 acre range . I have no knowledge of any other minerals being extracted from the region other than it having a history of Nat Gas . 

 I really don't know at this point why the buyer is requesting the 'mineral rights ' to be separated from the gas rights . 

Permalink Reply by BICS on April 23, 2015 at 5:29am

We implemented the same agreement but in Ohio. We retained the existing oil and gas lease and the new owner got the mineral rights. As long as the oil and gas lease exists we receive the royalties. Since the new owner has the mineral rights he is guaranteed we cannot mine minerals outside the lease agreement. If our lease becomes null and void he has full control. To implement this agreement there is a clause in the sale agreement and also a clause in the land deed reserving these rights. The oil gas operator has no issue with this agreement as long as it is recorded in the county records.

Permalink Reply by Frank Walker on April 23, 2015 at 8:23am

By Jove, BICS, sounds to me as if you may have unraveled this.  Good job!

And if you are correct, I don't like the deal.  I don't want to be in a position where my lease is locked into cement.  I want the flexibility, should something (today unforeseen) arise in future, to be able to go back in and re-negotiate my lease.  I'm not thinking solely of money.  I am thinking of stuff that could appear later that I cannot pinpoint or identify today.

As the saying goes:  "Stuff happens".  And if it does, I want to be able freely to deal with whatever comes up.

Finally, and in accord with the point you made BICS, if Joe's existing lease does not already cover all depths and formations, then anything not included belongs to the buyer!!  

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