Hello. We are looking to purchase land in Beauregard parish Louisiana. The seller is insisting on holding on to the mineral rights and insists that most people selling land now adays do hold on to the mineral rights of land they sell. This doesn’t make sense to me. If you are buying the property then it should be totally yours. Can you guys fill me in on if this is actually the norm now adays?
It is "ABSOLUTELY" the norm these days. But, it does not hurt to ask for some minerals.
Good luck,
Pat
In Oklahoma the surface "Land" and "Minerals" are sold seperatly. It is noted on our abstracts "surface only". But purchasing minerals will cost more but would be worth it. Good Luck
Tammy
It is not uncommon for someone to retain minerals in a sale of land especially in a parish with O&G drilling and production activity. It is something to negotiate with the seller. Perhaps they would agree to retain only an undivided 1/2 interest in the minerals. There is a law in Louisiana regarding mineral servitudes that are created when minerals are reserved in a sale of land that says, in effect, that if there is no drilling on said mineral servitude for an 10 year period, the minerals would revert back to the surface owner. Good luck with your purchase.
PS. I am not a lawyer and this is not legal advice.
ask for half, if the seller is firm on keeping the mineral, you have a choice to make as to wither to buy or not
It really depends on the area you are in how "common" it is for a seller to retain the rights. In Texas and Oklahoma is almost exclusively reserved the the seller. However, in Kansas, it is less common. When it becomes a show-stopper in a deal, I have heard that some buyers negotiate either receiving a portion of the minerals (say half, or 50%) with the seller retaining the remaining portion, or a deal where the seller gets to keep all of the minerals for a few years, like 5 years, from the closing date, where the seller gets the royalties for the next 5 years and after that it would revert to the buyer.
I know in Kansas that some buyers will absolutely not buy property without at least some of the minerals included. If a seller refuses, the buyer will find an alternative tract of land. In Texas, I don't believe it is quite as easy (or cheap) to find an alternative tract of land. The "power" that sellers have with retaining the minerals as a deal-breaker really depends on the specific area you are in. In Kansas, some people may not be able to sell their parcel with 100% minerals reserved because buyers in that area will not pay full price on acreage without minerals. In Texas it is pretty much assumed you will pay full price on acreage with NO minerals included.
Please remember that this is my opinion and not necessarily fact. Does this property already have oil and gas production? As Dick mentioned previously, in Louisiana the minerals could revert back to the surface owner after 10 years of no production.
Ruth,
I have surface worth 1/10th the value of the minerals. A few year back I purchased 160 acres to get 11 acres of minerals and then sold the surface.
I am in Oklahoma.
Louisiana mineral law differs in some aspect from that of other states. Before you buy, talk to a lawyer.
SELLILNG MINERAL RIGHTS IN LOUISIANA
1. Can mineral rights be sold if there is no drilling activity on land or if the land is not leased?
2. Is there a time frame after which the mineral rights revert back to the land owner if there has been no activity?
3. If the mineral rights are sold, does the land owner have a say in the use of the surface rights such as a well placement, equipment storage, right of way, etc and does the land owner receive the money?
4. If the mineral rights do eventually revert back to the land owner what happpens to the mineral rights if the land is sold and there has been no production, does the mineral rights come back to the original owner or the new owner?
5. If the mineral rights are sold can the person who bought the mineral rights sell them to someone else and how does that affect the land owner, for example if the mineral rights do revert back to land owner after so long would a sell to another person or company extend the time frame?
A friend of mine is under the impression that the land and mineral rights must stay together and I have read on GHS of people selling their mineral rights or could he mean the surface rights and mineral rights must stay together?
****************************
Answers:
Many of these questions have been answered before elsewhere in the forum. Short answers below (applicable as to LA); suggest searching GHS if you need more details:
1) Yes, minerals can be sold irrespective of activity on the land, or on lands pooled therewith in the event of an applicable field order or pooling agreement.
2) Yes, statutory prescription of ten (10) consecutive years of nonuse is applicable, however, parties may contract to a shorter period in the deed that created the mineral servitude.
3) Surface owner MAY have a say in the use of surface rights - it is all dependent on what rights are reserved and what rights are conveyed in the instrument that creates the mineral servitude. Also, dependent upon jurisprudence, check as to what may be applicable limits on surface estate may be.
4) Prescription always reverts to the instant surface owner at the time that mineral rights prescribe when involving lands in private ownership. Lands subsequently acquired by the state, state agency, or political subdivision - the rules vary. Check according to Mineral Code and/or an attorney - this is also dependent upon the facts.
5) Acquired mineral rights may be conveyed to other parties, however, the severance of mineral rights from the surface estate creates a mineral servitude that is subject to the Mineral Code and the contained rules of prescription. All subsequent sales are made subject to the existence or possible extinction of that servitude. Simply selling the rights to a third party will not serve to extend the servitude, dependent upon the facts, there are certain conditions which may exist to interrupt prescription or suspend prescription (check the Mineral Code and/or with an attorney) other than outright use.
Your friend, in short, is incorrect. According to the doctrine of the dominant mineral estate, a general conveyance of mineral rights provides for reasonable use of the surface to exercise one's rights to capture, however, surface rights associated with a mineral conveyance may be restricted or modified by contract between the parties so long as the parties do not act in a manner that is illegal, inapplicable to third parties (voidable), or in direct contravention of the public policy of the state. One may easily convey or reserve all mineral rights but waive all surface rights in a conveyance - this would result in one's right to capture to be solely limited to subsurface operations or restricted to operations occurring on lands and/or mineral rights that may be pooled with the subject property.
It's a cold, rainy day here in Houston, so with nothing better to do I decided to see what I could "google" for you. My first response was a "Texas" response.
Good luck,
Pat
If you love the property, make a deal (pay a lower price and/or share the minerals).
If you don't love the property, move on.
Bob Malone
Malone Petroleum Consulting
If your premise was correct, there would be no real need to do any title research prior to acquiring a mineral related lease on the property. Someone could probably take a lease based on the tax rolls. Louisiana is different in that it has a prescriptive period. You may still acquire the minerals some day. A seller doesn't necessarily reserve in perpetuity, say somewhere like Texas.
Thanks so much for all of your help. We will talk to an attorney as well I was curious how this worked. When we bought property in Texas before Mineral rights were ours with the purchase. Now in Louisiana this is happening and the seller stating this is common practice for seller to keep the mineral rights
It is common practice only for the informed and wise buyer and seller. You, like me, we are here to learn!!
It is not common practice for the uneducated who prefer to sit on the couch and watch TV all day long.
Bob Malone, Malone Petroleum Consulting
ABSOLUTELY - MUCH of the oil patch has severed mineral rights and in LA, if they are not developed within 25 years, they will revert back to you....within the limits stated above. BUT, I would never BUY land without control of the mineral. If they want to reserve 50%, I might relent but only if I have the executive control of the surface. Meaning I can prevent 100% of the mineral rights from allowing the oil company to actually site the well(s) on my surface property. So they can have 50% but I get to say whether or not a rig sits on my property.
BTW, if you had mineral rights in Texas, then you were lucky. I bet 70% of the minerals are severed in that state.
Ruth Ann said:
Thanks so much for all of your help. We will talk to an attorney as well I was curious how this worked. When we bought property in Texas before
Mineral rights were ours with the purchase. Now in Louisiana this is happening and the seller stating this is common practice for seller to keep the mineral rights
There are lotsa places where the mineral rights (per acre) are worth 10X the land value (per acre).
Does it make sense now?
Gotta be pretty lucky these days to get the minerals 'for free' when buying land, in any state where oil is/was/hasbeen produced.
There are a lot of people who THINK their minerals are worth 10x the land value. Currently, I know of very few places where that makes sense...and that is what I do for a living, value mineral rights.
A simple rule of thumb is that if wells are producing expected ultimate recovery's of 1 BCF per well, then the value of the mineral right to the mineral owner is going to be $1,000 or so per acre. A 3 BCF well average in a typical unit is therefore, about $3,000. I knew some folks who paid more than that and got wells drilled but still owe money and are a long way from paying off the $3,000. And with current low prices, the pay out keeps sliding off into the future.
Thx again for all the input. Just to clarify, there are no wells on this land and no rigs or wells any where near it. No obvious reason to think that there’s anything valuable underneath the land.
To me you are not getting minerals “for free” if you are paying for the land. You wouldn’t sell someone a used car and say oh btw, if something ever happens and you profit from this car in any way then the money belongs to me. Obviously we aren’t dealing with a used car but imo if you are buying the property then you should get everything that comes with that property. I was curious what is the norm in this area now adays. I really like TL Shields idea if the owner keeps insisting. Thanks again everyone!
The notion of "Fee Simple" is that you own the rights from the center of the earth to the sky above. In practical terms, you don't. Aviation has rights to the sky, and mineral rights can be "severed". You can also sever hunting rights, and I have actually seen a deed where the sellers retained the right to hunt deer on the property for the remainder of their lives. Easements also take a bite out of your "rights" as does roads, right of ways, utilities, etc. Even in mineral rights a deed may restrict it to oil and gas only, or uranium only (the government did a lot of that in the 1950s.)
Even the homestead act was amended. If you obtained land up until about the 1920s you got "fee simple" and afterwards, you typically got only the surface and the government kept the rest. Most people do not understand when they buy land in the West, they are usually going to be lucky to get any mineral rights. And usually it is Uncle Sam that owns them and many a complaint falls on deaf ears when a person builds a house on a Mtn hillside only to find a drill rig sitting up a few hundred feet from his house and doing so totally legally. The U. S. and some parts of a very few other nations allow private use of mineral rights. Almost all other countries keep the mineral right.
I have seen property listed with the notation that the seller wanted to retain wind rights. I didn't think that was possible, but I guess it is.
Our family's place is surrounded by those wind mills now.