Mineral Rights Question?

[Martinjmpr]

Correct me if I am wrong, but even if you don't own the mineral rights, you would still own the property.

Thus a 3rd party owning the mineral rights would have to lease/buy permission from you (the property owner) for egress/ingress, equipment storage (oil derrick, etc. ) , and anything else they needed that required access to your property so they could extract their minerals located under your property.

So if oil was found on your property, you could likely work out a deal for you to lease them access to your property, let them deal with extracting the oil, and perhaps require a royalty per barrel.
In a way, they do all the work, and you collect a check.

However, if they had access to the bordering property, I think they could drill from there, at an angle, and extract oil from under your property.

(I ask that someone with more first hand experience please comment on this...I don't want to mislead the OP.)

Nope, not true. Mineral rights are senior to surface rights. They can take the minerals without the permission of the surface owner. They can also use a reasonable amount of the surface in order to do it and they don't have to pay a dime to the surface estate owner.

Now, what I just said above is the strictest interpretation of the law and in the real world, most mineral estate owners are smart enough to know that it's better to get the surface estate owner on your side than it is to make an enemy of him. So in most cases they'll make arrangements for what they need and pay for any damage they cause. They might even pay a leasing fee although they don't have to. The reason they'll do that is that it's cheaper in the long run to do that than it is to spend $$$ fighting lawsuits.

As for water, water is not part of the mineral estate, it is part of the surface estate and is governed by the principles of water law, which are generally 'prior appropriation' , i.e. first to use = senior.

My understanding is that most lands in the West, especially small parcels, are split estate with one owner owning the surface estate and another (sometimes the Federal government) owning the mineral estate. It all depends on when and how the land was patented, that is, how it passed from Federal to Private ownership.

[th3w01f]

So do smaller lots, <35 acres usually come with water rights? I've only seen water rights on larger properties and we've looked at a bunch of ~5 acre properties all along Castle Rock and Sedalia and non appeared to have water rights.

[Martinjmpr]

So do smaller lots, <35 acres usually come with water rights? I've only seen water rights on larger properties and we've looked at a bunch of ~5 acre properties all along Castle Rock and Sedalia and non appeared to have water rights.

I don't think so but I have to admit I never studied water law so I don't know. Unless there's a river or stream on the property I can't imagine that it would be much of an issue.

[Great-Kazoo]

1st thing is consult an atty who deals with this and not the internet

2nd
If you don't own mineral rights they can park a well 50yds off your back door and you can't do squat about it. Complete with a fire tube if required.

The O&G company can drill as close as the contract says they can & local (city, cty state) laws for said distance applies. Up here you see then an easy 50' from homes. Even if you did own them where they decide to drill is up to them, again following local law.

The owner probably received (as everyone in this area) a few letters / contracts saying they would be paid $XX for lease rights. They are probably hoping said letter or rights has a big payday down the road.

For us in a residential area they would come in from a drill site maybe 1mi away and angle? drill for access. I looked in to signing the contract for $$ and it's a real in depth deal once you sign regarding rights, collecting for damage etc.

OT: we have a non-potable well, one of the few in town. If we signed one of the O&G contracts we could list the house saying WATER & MINERAL RIGHTS INCL. It sounds silly since we're in an older residential area. BUT those extra perks in a sale can add $$ for the seller

[th3w01f]

But the internet is free. You just made the prospect of buying just about any house on land somewhat daunting.

I get what you're saying about a lawyer but I'm guessing that means I would need someone on retainer to review every property we might be interested in since, like water rights, none of smaller lots we've looked at have come with mineral rights.

Anyone know if there's a bunch of drilling in the Elizabeth area? The area is zoned as a residential subdivision but I'm not sure if that means anything or if they could just go into the middle of the city and drill as long as they met the required distances.

1st thing is consult an atty who deals with this and not the internet

2nd
If you don't own mineral rights they can park a well 50yds off your back door and you can't do squat about it. Complete with a fire tube if required.

The O&G company can drill as close as the contract says they can & local (city, cty state) laws for said distance applies. Up here you see then an easy 50' from homes. Even if you did own them where they decide to drill is up to them, again following local law.

The owner probably received (as everyone in this area) a few letters / contracts saying they would be paid $XX for lease rights. They are probably hoping said letter or rights has a big payday down the road.

For us in a residential area they would come in from a drill site maybe 1mi away and angle? drill for access. I looked in to signing the contract for $$ and it's a real in depth deal once you sign regarding rights, collecting for damage etc.

OT: we have a non-potable well, one of the few in town. If we signed one of the O&G contracts we could list the house saying WATER & MINERAL RIGHTS INCL. It sounds silly since we're in an older residential area. BUT those extra perks in a sale can add $$ for the seller

[th3w01f]

Working the the water resources department was kind of cool, the woman did some research and came back with the original plans for a 'Livestock Water Tank" from 1951.

http://dwrweblink.state.co.us/dwrweb...5-62627e27796c

She said it's a very little discussed topic around there but that they're generally exempt.

[Great-Kazoo]

But the internet is free. You just made the prospect of buying just about any house on land somewhat daunting.

I get what you're saying about a lawyer but I'm guessing that means I would need someone on retainer to review every property we might be interested in since, like water rights, none of smaller lots we've looked at have come with mineral rights.

Anyone know if there's a bunch of drilling in the Elizabeth area? The area is zoned as a residential subdivision ( up here the derricks are in between housing / platted lots) but I'm not sure if that means anything or if they could just go into the middle of the city and drill as long as they met the required distances (Yes) .

You're over thinking and complicating the buying issue. Get the seller AND realtor, to explain exactly what the mineral rights you do not get entail, IF you buy the property. It's the realtor's responsibility to have disclousre on property thay are listing.
Make sure what he says is in writing and you have an O&G attorney simplify it for you. They run $150-275 an hour, no free consultation. That money laid out could solve issues down the road, IF you look out one morning and see them putting up berms next to your shop.

The internet is not the place to think what your next step or options are. Ideas & suggestions, yes. Legal advice that protects you, not w/out said advice possibly putting them in a jam.

but, but an attorney on line said i could.


DISCLOUSRE: I'M NOT AN ATTY, REALTOR, OR ONE SELLING THE PROPERTY. JUST someone who has run in to issues like this before. It was worth the money spent on an attorney BEFORE hand. YMMV.

[CO Hugh]

You're over thinking and complicating the buying issue. Get the seller AND realtor, to explain exactly what the mineral rights you do not get entail, IF you buy the property. It's the realtor's responsibility to have disclousre on property thay are listing.
Make sure what he says is in writing and you have an O&G attorney simplify it for you. They run $150-275 an hour, no free consultation. That money laid out could solve issues down the road, IF you look out one morning and see them putting up berms next to your shop.

The internet is not the place to think what your next step or options are. Ideas & suggestions, yes. Legal advice that protects you, not w/out said advice possibly putting them in a jam.

but, but an attorney on line said i could.


DISCLOUSRE: I'M NOT AN ATTY, REALTOR, OR ONE SELLING THE PROPERTY. JUST someone who has run in to issues like this before. It was worth the money spent on an attorney BEFORE hand. YMMV.

I echo this. Also I would never recommend agreeing to the seller retaining any rights without knowing specifically what those rights are. Additionally, if it is the seller with the rights you should negotiate the terms for access to the rights.

I think you should retain the rights. A weaselly secret is that though the contract discusses the rights, the deed may not, because title companies don't prepare deeds like that, then he would retain the rights.

See a lawyer. I practice in real estate but not O&G.

[th3w01f]

I agree to a certain extent but I think it's others that are over thinking it. The wording seemed pretty clear as far as what mineral rights are being transferred (none). I was able to verity that the seller doesn't own the rights, hence they can't convey them to me. Would you really track down the actual owner of mineral rights to any property you're buying? Not saying that's a bad thing but it seems like overkill.

Having an O&G attorney involved in every home purchase transaction seems like overkill but that's just me.... and I'm pretty paranoid to start with.

[Great-Kazoo]

Having an O&G attorney involved in every home purchase transaction seems like overkill but that's just me.... and I'm pretty paranoid to start with.

Not for every purchase, just the one you have concern about. This one. Very few deals involve mineral rights, if any. The up side is these were not the current owner's either. That's a good thing since there has been no test drilling etc in this latest boom.