My deeds stated there were past mineral rights kept by various prior owners, but my Grantor was not reserving any. I followed deed history back to early 1900’s, and found lots of grantors reserving 1/32, 1/8, 1/4 etc and passing on similar amounts to grantees, on various portions of what is now my land. There has been no leases or any drilling for the 20+ years of my ownership, and for several years prior to that.
Does this mean all prior rights, since not used, pass to me? If rights that prior owners held have no documented inheritance to heirs, do they just disappear and revert to surface owner? Many of these go back 100+ years and suspect any heirs alive today may not even know they have inherited rights. And how on Earth does anyone know how all the various percentages work out, and may exceed 100%?
So bottom line as I consider selling my property and passing through any rights I may have, should the buyer be concerned that his surface rights could be exposed to some future mineral rights owner leasing to oil driller?
Here’s a non-expert opinion and probably not what you are hoping to hear.
In Texas lack of leasing or drilling activity for any period of time doesn’t extinguish mineral rights. In other words, if the chain of title to your property includes reservations of mineral interests they remain reserved and won’t revert to you as the surface owner. The law is different in Louisiana but that’s the case in Texas. The only way you could gain control of those previously reserved mineral rights would be to buy them from whoever currently owns them.
Determining what portion of the mineral interest, if any, passed to you when you acquired the property requires reviewing all of the documents in your chain of title and totaling all of those partial interests that were previously reserved. If your tract was originally part of a larger piece of land and different reservations applied to different parts of that original tract it makes the job of determining what applies to your tract harder but that’s what it takes. It’s also important to determine whether the interest that was reserved was a mineral interest or just a royalty interest. Like you said, reservations made years ago by now may have passed through several generations of heirs who may not be aware they own them and be difficult, if not impossible, to locate. They still own the reserved interest. In cases where there is production and heirs can not be located the State of Texas ends up receiving and holding their share of the royalties.
It sounds like the research you have already done may give you a pretty good handle on how much interest has previously been reserved. If not, that’s the sort of thing petroleum landmen work on everyday. Depending on the size and value of your property, having a landman, or attorney, review your chain of title may be what will be required to pin down what is involved.
On your question about whether someone you sell to should be concerned about the status of surface control to your property, in my opinion they should be. Unless those prior reservations were royalty reservations which don’t impact surface control, or the previous mineral reservations included wording waiving surface use related to those reservations, which would have been unusual years ago, then you don’t have full surface control and therefore couldn’t pass full surface control to a buyer. That title research mentioned earlier would be able to determine your degree of surface control. Depending on the type property you are talking about many potential buyers don’t know enough about minerals to question the status. A knowledgeable buyer may be willing to accept it with little or no mineral interest but if you don’t own at least 50% surface control probably won’t be willing to close unless a waiver of surface use could be obtained from whoever owns the majority mineral interest, or would require a concession on the sales price in return for accepting that risk.
Dusty is correct. Once a mineral interest of any type in Texas is separated, it remains so with a few exceptions. The retained interests could be for a time specific duration. An example is “for ten years or as long as oil or gas, if any, is produced”. After ten years, assuming no activity is occurring, the interest reverts to the buyer. Title companies generally will get a affidavit stating no production has occurred.
A second exception is when title to the sold interest reverts back to the seller. This can occur when the seller did the financing and foreclosed due to buyer default.
What percent was reserved is the stuff for lawsuits if the production is large enough. Too many earlier deeds used wording like “1/2 of the usual 1/8 royalty” as opposed to simply “1/2 of any minerals.” Also look for any right to lease retained by earlier sellers. I manage retained rights from the 60’s passed through two estates. We no longer own any of the land, just the minerals. You may not have much mineral interest but, you may own the leasing rights.
In Texas, if there has been no mineral lease activity for a significant period like 32 years, the mineral interest generally does not automatically revert back to the landowner, as mineral rights typically last indefinitely unless explicitly transferred or abandoned; however, depending on the specific lease agreement, if production ceases during the primary term of the lease and certain conditions aren’t met, the mineral rights could revert back to the landowner.
Key points to remember:
Severed Mineral Estates:
In Texas, the surface land ownership can be separate from the mineral rights ownership, meaning someone can own the surface land while another party owns the mineral rights beneath it.
Lease Terms Matter:
The specific terms of the mineral lease will determine what happens if there is no production activity for a long period, including potential provisions for lease termination or reversion to the landowner.
Primary Term:
Most mineral leases have a “primary term” which is a set period where the lessee must begin production or exploration activities, if they fail to do so, the mineral rights may revert back to the landowner.
Please do not trust AI for legal questions. Lease terms do matter and Primary terms do matter, but the use of “landowner” in the post above may not be used correctly depending upon the state. One should use “mineral owner” for more clarity with regard to those terms.
All terms in law and especially those found in leases, deeds and tax sales are unique with respect to each other and need to be use appropriately.
In Texas, the operating companies own a fee simple determinable in the mineral estate. The fee simple determinable is a present possessory interest that terminates naturally at the happening of a prescribed event. It will end when oil and gas is no longer being produced in paying quantities or, other conditions that can occur when a lease is not held by production.
At the termination of the fee simple determinable, the mineral interest automatically reverts back to the mineral owner if the mineral rights/interests have been separated (severed) from the land. They can only go to the landowner if the interests have not been severed. No action is required on the part of the reversionary interest owner.
There is a case in Texas where “minerals” were sold for non-payment of taxes. The purchasers’ at the tax sale only received title to the production royalties and did not get the reverter with the sale. The court reasoned only severed minerals under the lease was taxable and could be sold by the sheriff. The reversionary interest was not taxable and thus not part of the sale. When the leases ended, the original mineral interest owners who failed to pay the taxes got their mineral interests back through the reverter.