Mineral Rights - Did I screw the pooch?

[ericinok]

Any way I can find out how much someone is getting for their mineral rights? We recently bought our place, but the sellers retained the mineral rights. Our realtor told us it wasn't enough to worry with, but that may have just been her getting out of additional work.

The man who checks the wells every day on our land asked me if I got the rights. I told him no, and he just kinda half-smiled like I had messed up. To be honest, I don't know enough about them to know what to ask, and it was the last thing on my mind when buying the place.

I certainly don't begrudge the sellers any. they were super people and very helpful in our move on to the property. But now I'm starting to think I should have investigated this a little bit. Any suggestions?

[4sarge]

I live in the Mid-West and I think things are a little different depending upon where you live regionally. I would never buy w/o owning the whole place including the mineral rights. Our current farm (previous owner) had given a 5 year time option on oil/gas to a prospector but I wouldn't buy unless that was transferred to me. I do not like it - it's almost expired and definitely will not renew. just my thoughts

OK - being an oil state may be different

[JazzDad]

Oooo, don't get me started. We are in the process of fighting an exploration company as I write this. Texas allows a minimum (as low as 1%) mineral rights holder to allow a company on your property. We are trying to keep down the possible damage these companies may cause when they do their seismic testing. If they find minerals they want, we'll have another fight protecting everything all over again.
Contact the state agency that regulates the companies that retrieve minerals, and read everything you can get your hands on to understand your rights.

[CowboyUp]

It's my understanding that mineral rights supercede land rights. That means that whoever owns the mineral rights can pretty well come in and do all the drilling they want to. However, they must also maintain the ecology of the property. In TX, and I think this applies elsewhere, drillers must provide and maintain access roads to the drills and keep the area safe and environmentally clean. Of course, if the land owner is the mineral rights owner then it's no big deal, but if another party owns the mineral rights then it can become a nuisance battle. I don't own the mineral rights to my property. In my part of TX, often it's next to impossible to purchase the mineral rights because they have been owned for generations by original land owners or by oil production companies. In fact, the person I bought my land from had purchased the mineral rights to it from an oil company who had already drilled the place and shut those drills down years ago. I had no idea those rights might be available, but I'm not too concerned that this guy will drill. It's an expensive process. And even though stripper wells are being opened again because of the high price of oil, I doubt that someone will attempt to drill to capture a couple of barrels of oil from my place. I have heard, but not confirmed so take this for what it's worth, that the land owner is entitled to a small portion of the minerals taken from the property. Actually, I hope I never have to deal with this. I don't want somebody else's pump jack in my front yard even if it is making me a few bucks.

[Bird]

</font><blockquote><font class="small">In reply to:</font><hr />
I would never buy w/o owning the whole place including the mineral rights.

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Like Cowboyup said, you're not likely to ever own any property in North Texas because you'd probably not be able to buy the mineral rights.

[jimbrown]

Won't own any in Arizona either as the copper companies bought it all up 60 years ago.

[Pat]

As a fellow Oklahoman and long time owner of mineral rights not connected to property that I own, let me reassure you that buying the mineral rights to land in Oklahoma when you buy the property is not very likely. First off, the seller may not and often does not own the rights because they were sold previously during some oil boom.

Everything has a price but why would you wnat to buy the mineral rights to your property. The seller would charge you what they thought it would be worth and you would have to take your chances in trying to recover that cost in the face of uncertainty. Oil prices are volatile and just how much oil can be recovered from your place economically is an unknown. If you want to speculate you can go to a cassino. Finance a wildcatter if you want to speculate in oil.

The mineral rights I have are from property in my family long before I was born. Various percentages of the mineral rights for the different parcels are split between my sister and I. So far the cumulative total of payments of the mineral rights from previous family land has not totalled up enough to buy a new car, more likely about enough for a short vacation in our truck camper. We go years between receipt of payments. I recently (about 3 yeqrs ago) inherited some mineral rights from an aunt and I get about $40 a quarter (or is that every 6 months???). Whoopee!!!!

Not that some folks aren't rich from mineral rights but you came along several decades late to expect to buy land with decent oil and gas prospects with intact mineral rights. Don't get all crest fallen and depressed.

The 160 acres I built my new house on has two operating oil wells and a small tank battery to collect the oil for a tanker to pick up. I get nothing from this. Didn't expect to. Withough expectation there is no dissapointment. They don't bother me. the pumper is a friend and neighbor (retired USAF.)

I'd be pleased if they quit producing because the equipment would be removed and the traffic into the wells would be stopped plus I'd gain a couple acres of pasture. Mostly you'd never know the wells were there unless a packing gland is squeeking and the pumper will fix that as soon as he knows it is happening. The oil folks maintain a couple cattle guards on the perimeter fence (higher quality than I bought for myself) and maintain some gravel road connectivity to the wells and tank battery. I use the roads a lot and find them convenient.

Bottom line, GET OVER IT. you did not make a mistake and you were not cheated. There are less risky ways to invest money besides buying mineral rights. I understand how you might get emotional because a small part of YOUR PROPERTY belongs to someone else. In general, private parties have mistaken emotion clouded views of the worth of MINERAL RIGHTS and buying from a private party is probably a bad idea. If you want to buy mineral rights at a fair price look into the companies that do it professionally.

Pat [img]/forums/images/icons/smile.gif[/img] [img]/forums/images/icons/smile.gif[/img]

[ericinok]

Pat, I think you are right. The more people I talk to, the better I feel about it, I guess I was just afraid of the unknown.

Funny you should mention "going to a casino". That's a pretty easy chore these days in Oklahoma, isn't it? Me thinks the Indians are slowly buying back all their land and will eventually kick us white folks out.

[Pat]

Eric, What you mean "US" white man? Actually I am part Indian but for quite a spell having any Indian blood was not always thought of as a good thing. I know several folks who could have qualified to be on the Indian roles but whose family did not do it and now there is no paper trail and it is an opportunity lost. When I was in high school you had to be at least 1/4 for the school to get extra money for you so below that they didn't track it. My maternal great grand mother who I was privileged to know came to Oklahoma from Denton Texas in a covered wagon with her white husband (preacher.) She was a breed but no one ever told my mom what tribe and all that is lost to us. So I am at best 1/16 something aboriginal.

Yeah, now that the Indian casinos are making big bucks, everyone is suddenly Indian or wants to be. So long as the stupid white folks remain eager to pay big bucks to the Indians to have a vanishingly small chance of getting rich the Indians will have surplus cash to invest and are doing so. At least some of the better informed and organized are. In some communities there is no such thing as a real housing bargain because the Indians are buying up the real estate, fixing and remodeling (some of the tribes have several full time crews doing this. Just souith of Shawnee a tribe is putting in a big industrial park. The Chairman (Elected office in place of hereditary chief) of the Citizen Pottawatomie Tribe is a big time Black Angus producer and the largest discount super market in Pottawatomie county is owned and operated by the tribe and features this beef.

If enough dummies throw enough $ to the Indians they will, over time, probably own most of what is available to buy that is worth having. Not all of the Indians are good buisness managers. Two of the factions involved with the River Mist Casino near Konawa have been fighting over who gets what and their casinio has been closed for over two years. You'd think they would operate the darn thing, bank the surplus, and fight over the $ later. As is their isn't an income stream to fight over.

There is greed and then there is stupidity.

Anyway, mineral rights to land that has already been explored and developed at some time in the past are nothing to fret over.

You should sort of keep an eye on the oil company operations. They take illegal shortcuts all too often. Right across the road from me a new owner is suing the oil producer for ecological damage from salt water. It killed several trees. They came in and excavated the contaminated soil and replaced it. They brought in sod to jump start the grass. Apparently the owner wasn't satisfied and has a law suit against them.

Sloppy practices increase the danger of messing up an aquifer. Around here lots of wells get brackish water because of poor practices in the "old days" of developing oil fields. Even with the best practices in current operations, you have no guarantee the original work was ecologically sound.

Years ago before I bought this place an oil operator was dumping salt water in one of the ponds and when it overflowed it ran into the South Canadian river. They got caught and had to clean it up.

Pat [img]/forums/images/icons/smile.gif[/img] [img]/forums/images/icons/smile.gif[/img]

[ericinok]

I am very familiar with the Pottawatomie Tribe. We lived in Shawnee for a while and my wife worked at the First Nat'l Bank there, which is owned by the tribe. It's funny, the loan application for a tribe member was a lot shorter than anyone else.

Are you speaking of Rocky Barrett? The whitest indian I've ever met. The Pottawatomies certainly don't mess around... casinos, golf courses, bowling alleys, grocery stores, etc.

The tribes around Tulsa (Cherokee and Creek) are the only industries actually building inside the city limits, and all they are building is more parking lots to hold the cars of all the people that are gonna hit it big one day (ha ha). Anything else going up in Tulsa is a product of our 9% sales tax rate ( [img]/forums/images/icons/mad.gif[/img] grrrrr), like the 300 millon dollar arena to house an arena football team. Great idea guys. Glad I live in Creek County.

I say we just have an election and legalize gambling in Oklahoma. At least we could fund some roads that aren't turnpikes, maybe improve education and build some more prisons for the bad folk.