Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: TheOldLady
Fracking is going on here in Ohio, and we are NOT required to sell our land to the mining company. We sell the right of drilling on the land, not the land itself. It is all still our land.

Which is the way it works everywhere else I know of.

Mineral rights and surface rights should be separate in the lease: specific surface locations may be leased out at the property owner's discretion for production, drilling, or pipeline right of way, but that should be separate from the mineral rights, and should require a separate agreement.

As always, when dealing with legal matters, it is best to have your own attorney, who will look out for your interests.

What I have been reading about working interest versus royalty interest seems confused, too.

Working interest means you pay for part of the well, depending on your mineral rights ownership, percentage wise. Royalty interest is the cut the owner of the mineral rights gets of produced oil and or gas sold, usually ranging from 1/8 (12.5%) to 1/5 (20%) for their fraction of the lease spacing (if you own half of the mineral acres, then multiply 1/2 times the royalty interest agreed upon, say, 1/8, and your cut is 1/16 of the value of production. Depending on the agreement, that can be before or after expenses.

Leasing mineral rights does not sell your land, despite the fact that the guys who offer leases are called "landmen" and the term "land acquisition" is commonly used in conjunction with that leasing activity.

Mineral rights can be sold, too, but if you own the mineral rights, I would not sell them. Many separated the mineral rights from the surface ans water rights in tough economic times and sold them to save the farm or whatever, and those who have either purchased or inherited the property since regret that. You can sell property and retain the mineral rights, and in some areas that has become a fairly common practice, so if you are a buyer, make sure what you are getting.

With surface rights it is common to retain the right to all coal, sand and gravel, etc. within a certain distance of the surface, commonly 1000 ft. This keeps the surface intact from pit mining operations, and in the instance of leasing the right to explore for and produce oil and gas, stipulate that oil and natural gas are what is involved in the lease--don't get blanketed with an 'all valuable minerals' clause.

Those are basic safeguards which any knowledgeable attorney in the field should have in place or insist upon.

Keep in mind the minerals are yours if you own those rights, and you do not have to lease them. If your holdings are considered 'minor' and the drilling permit is issued anyway, consult your state law to determine what royalty interest you will be due, and the procedures to obtain those royalties.

Most oil companies I know of are on the up and up, and will treat you fairly (they don't need bad press from screwing anyone over, and even a hint in the media will get them that), but have your own representation.

Please note: I'm just a consulting Geologist, so this is not legal advice (I am not a lawyer).

39 posted on 01/02/2013 8:17:38 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
[ Post Reply | Private Reply | To 37 | View Replies ]


To: Smokin' Joe
Don't worry, Joe. I won't sue you if you're wrong about something.   ;) winking

We have a contract that we waved in front of our lawyer, and everything is on the up and up. We are leasing, not selling, our mineral rights.   :) happy 

40 posted on 01/02/2013 8:30:40 AM PST by TheOldLady
[ Post Reply | Private Reply | To 39 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson