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Mineral Rights: Bought vs. Leased

Smawgunner

Junior Member
223
61
Athens
Maybe this has been covered and I apologize if so. But I'm looking at property where the mineral rights have been "Severed" according to the realtor. My guess is that this is the same as being sold. If a company leases rights, there is a contract between the company and the land owner. If that were the case, I could see all the language and stipulations within that contract. But if the rights are sold to someone else...would there be a contract between the previous land owner and that company? I've heard that sometimes rights have been sold as far back as the turn of the century...then what? I REALLY want to find out the terms before I buy. The land is in Athens county BTW.

Thoughts?
 

bowhunter1023

Owner/Operator
Staff member
48,914
274
Appalachia
Severed minerals and sold minerals are not exactly the same thing, but that is a technicality that really does not need to be expanded on. Being severed just means the rights to the surface and the rights to the minerals are no longer one in the same. You can sell the minerals, which in turn severs them from the surface. However there are other ways to sever minerals than just selling them.

The only way there is a contract (lease) involving the landowner is if the landowner owned the minerals at the time of the lease. If the minerals were severed in full prior to a lease being signed on the minerals, then the landowner would have no part in negotiating a lease on the minerals. In cases where the minerals were severed years ago, you will need to have a full mineral title ran on the property in order to find out who signed to the lease and who has the rights to the lease today.

If there are existing operations on the property, then you can look on the tanks/pump jacks for any identifying information regarding who operates those facilities. You can also try using the DNR's Emergency Well Locator in an effort to identify who owns the existing wells.

If that is unsuccessful, then you will need to spend some time in the courthouse. I can type a novel on how to run title, but it will bore you to death and ultimately, I'll confuse you also. A competent realtor should be able to help you track down the current operator, but that is not always the case. With some of these older leases, the ma and pa operators can be hard to identify. Like I mentioned in my last PM, I'll help you however I can. Start with the well locator and see if that helps you and we can go from there.
 

Smawgunner

Junior Member
223
61
Athens
Severed minerals and sold minerals are not exactly the same thing, but that is a technicality that really does not need to be expanded on. Being severed just means the rights to the surface and the rights to the minerals are no longer one in the same. You can sell the minerals, which in turn severs them from the surface. However there are other ways to sever minerals than just selling them.

The only way there is a contract (lease) involving the landowner is if the landowner owned the minerals at the time of the lease. If the minerals were severed in full prior to a lease being signed on the minerals, then the landowner would have no part in negotiating a lease on the minerals. In cases where the minerals were severed years ago, you will need to have a full mineral title ran on the property in order to find out who signed to the lease and who has the rights to the lease today.

If there are existing operations on the property, then you can look on the tanks/pump jacks for any identifying information regarding who operates those facilities. You can also try using the DNR's Emergency Well Locator in an effort to identify who owns the existing wells.

If that is unsuccessful, then you will need to spend some time in the courthouse. I can type a novel on how to run title, but it will bore you to death and ultimately, I'll confuse you also. A competent realtor should be able to help you track down the current operator, but that is not always the case. With some of these older leases, the ma and pa operators can be hard to identify. Like I mentioned in my last PM, I'll help you however I can. Start with the well locator and see if that helps you and we can go from there.

Thanks Jesse. I tried their website and there are two wells listed that were plugged and could not be found on the property. But there IS a well on the property that is not on the map. strange... The well that is there has "Columbia Natural Resources" on it with permit #s etc. I cannot find their website. But if I understand you correctly, if the rights were severed years ago and someone still holds those rights, they could at anytime negotiate with a company to lease them and you are left out of the negotiating process in determining the terms of the contract. A scenario nightmare: the two parties agree that the leasing company can have access and use of all water on the property with the exception of well water.
 

bowhunter1023

Owner/Operator
Staff member
48,914
274
Appalachia
The rights are already under lease, hence the active well. You're already screwed in regards to having any say in future oil and gas operations. That's the drawback to buying land without minerals.

I can get you in touch with Columbia tomorrow.
 

Jackalope

Dignitary Member
Staff member
38,859
260
Jesse you can correct me if I'm wrong. While he may be screwed as they are already leased, the leasing company still has to abide by the terms and stipulations within the lease. Access to water, surface conditioning, And other stipulations in the lease must still be followed. As the surfice owner it would still be a good idea for him to get a copy of the lease to see what rights he has.
 

bowhunter1023

Owner/Operator
Staff member
48,914
274
Appalachia
Yes, the operator of the lease must abide by the terms within the lease. Chances are it is an older lease and largely wide open in terms of what they are allowed to do. As a landowner he really has no say and unless it was a newer, landowner minded lease, it will benefit the operator 9 times out of 10.
 

Smawgunner

Junior Member
223
61
Athens
And being in Athens county,..I haven't seen much havoc by these companies. Strip mining for coal etc. isn't going on anymore. And the oil rigs I've seen are small and quiet. I'm not too terribly concerned but I just want to know what I'm getting into being new to purchasing recreational property. Thanks guys!
 

Ohiosam

*Supporting Member*
11,736
191
Mahoning Co.
My sister has a 250 acre parcel with several producing gas wells on it. There is no record of a lease recorded at the courthouse and the gas company can't produce a copy of the lease. Needless to say lawyers are making money on the deal.
 

Huckleberry Finn

Senior Member
15,973
135
My sister has a 250 acre parcel with several producing gas wells on it. There is no record of a lease recorded at the courthouse and the gas company can't produce a copy of the lease. Needless to say lawyers are making money on the deal.

It's amazing the difference that $5/acre and 12% and $4,000/acre and 16% make, doesn't it?