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Mineral Rights

DEFINITION

The right of a property owner to excavate and remove liquid, gas, and solid minerals located below the surface of their properties.

EXPLANATION

Mineral rights are the granted rights of the owner to claim possession to minerals such as coal, gold, silver and gravel found on the property. As the owner of the land, a landowner has the right to transport minerals found on their property, unless otherwise barred from the government.

Mineral rights ownership, also referred to as a mineral interest, is an estate of real property. It is called a mineral estate. The mineral estate gives the landowner the right to mine the land below the property’s surface for economic purposes. Mineral rights include the right to extract organic and inorganic material that make up the natural soil of the land.

Major elements of mineral rights include:

Right to access the surface in the capacity needed to reasonably access the minerals

Right to receive royalties

Right to bonuses

Right to further convey mineral rights to others

Owners of mineral rights can sell or lease their mineral rights. Mineral rights owners may be entitled to royalty checks if the land is being explored by an oil and gas company.

Example

Jack Donigan believes his property may have oil under the property’s surface as his friend Bob Massey, a nearby neighbor, found oil under his property. In an attempt to find the oil, Jack hires an oil company to inspect below the property’s surface. Upon inspections, Jack discovers massive oil reserves and decides to lease the reserves to an oil company. Believing that he may have found his new business, Jack decides to drill under his neighbor’s property. Upon beginning the drilling under his neighbor’s property, Jack’s neighbor files a lawsuit against Jack to prevent Jack from drilling on his land. The lawsuit alleges that jack is entitled only to drill directly beneath his own land and not the land of others.

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