Private citizens need oil and gas attorneys if companies approach the citizens about extracting oil from their land. Under these circumstances, the landowner needs to define their rights to not just their property but also to any profits or royalties from the resources extracted from their land. Ownership rights are something that landowners must understand before signing a contract to allow any organization to use their land for resources. Here are some steps that landowners should follow when preparing to meet with an oil and gas attorney.
Your Rights as a Landowner
According to property rights laws in the U.S., all landowners gain surface and mineral rights once they’ve purchased land. No one can take these rights from the landowner, but the landowner can sell the mineral rights. If a landowner is approached by a company or any other party, the landowner needs to meet with an oil and gas attorney to review the documentation and decide if the venture is right for them.
Do You Want to Sell or Lease the Land?
Leasing a portion of the land to a company gives the landowner rights to the surface and minerals. The organization that leases the land can use the minerals underneath the surface for a predetermined time. Landowners get a portion of the profits for the minerals extracted from their land, or they sell mineral royalties to the buyer.
If they lease the land to the company, the landowner controls their land, and they can dictate where the company extracts minerals on the property. As an example, the landowner can prevent the company from extracting minerals too close to their home or near fixtures on the property, such as a swimming pool or garage.
Understanding Surface Rights
Regardless of whether the landowner leases or sells the mineral rights, they retain surface rights. This means the landowner can do whatever they want with the surface of the land, and they can grow crops or build structures on the land. If the landowner wants to build an addition to their home, the company extracting the mineral would have to find a new route to get to these minerals. Even if they have mineral rights, these companies cannot use legal action to stop the landowner from using the surface of the land.
The Right to Sell or Transfer Ownership
Landowners who retain surface rights to their land have the right to sell land to another party. They also have the right to transfer ownership to an heir through their will, and an oil and gas attorney can help them create a contract with another party to retain mineral rights to the land.
Typically, once the landowner sells or leases the mineral rights the property becomes a split estate, and the new owner must understand that the company still has the right to use the minerals. Landowners that give land to an heir create a fractional estate. All parties must understand their rights and how the new estate works.
Oil and gas attorneys help landowners define their rights to their land in contracts with other parties that want to use minerals beneath the surface. These contracts give each party access to profits or royalties from the resources, and the contract terms define how much money the landowner gets from these sales. Talk to an oil and gas attorney if you are approached by a company that wants to extract minerals from your land.