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New Post has been published on http://phillipsenergy.com/2015/09/16/a-homeowners-guide-to-mineral-rights-and-their-real-estate/
A Homeowner’s Guide to Mineral Rights and Their Real Estate
If you possess mineral rights beneath your land, you retain an extremely valuable asset with potential to generate revenue for years to come. You have the option to sell your mineral interests outright, or instead lease your rights to a drilling company for a small upfront bonus, along with the promise of regular royalty payments in the future.
But before you plan on signing a lease on your rights, there are numerous factors you should consider that will help you protect yourself and your financial future. The following are questions to research, and we also encourage you to seek consultation with a mineral rights expert at Phillips Energy Partner, before you make any final decisions.
Do I Own the Mineral Rights?
This is perhaps the most important question to ask yourself before moving forward in your valuation exploration. Do you own the mineral rights beneath your property? Or do the rights belong to a third party?
In some situations, the surface rights (rights to build and farm on the property) and mineral rights are owned by the same party, a concept known as “fee simple” in a collective sale. In other circumstances, however, the rights are owned by multiple parties; here, the rights are considered “severed.”
How can you tell if you own the rights? In some cases, ownership may be shown directly on the deed to your property. Or, if you believe you own the rights, but don’t have proof, you can search county records or create a chain of title backwards from the present to help you determine.
Can a Mineral Owner Drill on My Land if I Don’t Own the Rights?
What happens, then, if you don’t own the mineral rights on your property? Does the mineral interest owner have the right to drill on your property?
Unfortunately, if someone else retains rights to the mineral interests beneath your land, they may be allowed to build a well and begin drilling on your property. Of course, the extent of this should be dictated in a mineral deed, which may restrict the amount of time during which drilling can occur, or it may prevent excavation beneath a specific depth.
I’m Buying Property. Am I Buying Mineral Rights as Well?
In the event that you are about to purchase property, you may also be interested in whether or not you will gain access to the mineral rights as well. In fact, the availability of this answer depends on where you live.
For example, if you live in one of the “disclosure” states, which include Louisiana, Michigan, North Carolina, Ohio, Texas, and Wisconsin (both Florida and Colorado are currently considering disclosure laws as well), property sellers are required to disclose whether or not the mineral rights have been severed from the land. However, if you plan on purchasing property in any of the other 42 states, you may need to conduct the aforementioned research beforehand to discover who owns the mineral rights.
Consider Consulting a Professional
Answering these questions can be difficult without the assistance of a trained professional. If you need help determining whether or not you own mineral rights and/or what the value of those mineral rights are contact Phillips Energy Partners today for a free initial consultation.