In most countries of the world today, all mineral resources are usually under the ownership of the government. This includes all valuable rocks, minerals, oil or gas found on or within the Earth. Organizations or individuals in those countries cannot legally extract and sell any mineral commodity without first obtaining an authorization from the government.
However this has not always been the case. In the United States and a few other countries, ownership of mineral resources was originally granted to the individuals or organizations that owned the surface. These property owners had both “surface rights” and “mineral rights”. Mineral rights can also be described as the intangible value associated with a certain piece of land. Oil and gas mineral rights are the rights to remove oil or gas that may be contained in and under some land. In jurisdictions that support such rights, the mineral rights are usually separate from the other rights to the land.
Oil and gas mineral rights entitle a person to explore and exploit the land to extract oil and gas minerals from that piece of land. They produce the oil and gas that is found from below the surface of a tract of land. One of the distinguishing features of these mineral rights is that the owner of the oil and gas mineral rights can transfer the rights to other individuals. They can do this by selling, leasing or gifting, a part of, or the entire land, as per their discretion. They can also sell rights to beneath the surface and keep the rights of the land with themselves. Oil and gas companies usually aim to acquire rights to only the surface of the land, the particular portion that contains the minerals that they wish to extract. This is because they wish to avoid the additional price they may have to pay for the acquirement of the land (which is at the surface). Since, that chunk of land is of no use to them, they wish to avoid it by any means that they can, their prime motive being to make the deal cost effective.
Dealing with oil and gas mineral rights may be complex. Even after the land is acquired, the drilling process is usually deferred because the companies have to obtain a special drilling permit for the extraction. On the other hand, a land owner may have different interests. Consequently, oil and gas companies have implied obligations including a duty to develop the lease, a duty to protect against drainage of the reservoir from neighboring tracts during the extraction from the land. They also have a duty to pay any royalty that are due under the lease agreement. One wonders how a business litigation attorney comes in such a picture. In such a multifaceted transaction, there are many loopholes and elements of fraud where the companies may wish to avoid as much payment as possible. One may find means to avoid the payment of royalty. An experienced attorney of oil and gas can help you provide consultation and ensure that you are being paid completely as per your bargain. Thus, if your company is facing such a complication and you require any sort of information and a free consultation, a competent oil and gas attorney like Jay Don Watson, is the right person to approach.
For more information about our Oil & Gas legal services in and around Bryan/College Station, Texas, contact the Watson Law Firm Today.