1) Get professional assistance: Mineral rights and mineral lease transactions involve large amounts of money and are very complex. This article is intended to be no more than a brief introduction. If you are contacted about leasing or selling your mineral rights, you should promptly get advice from an attorney who has expertise in mineral transactions…

The amounts of money that change hands in mineral property transactions can be huge in comparison with the average person’s financial experience. The total yield (lease + royalties) or mineral sale price can often exceed the value of the surface rights. Let’s consider two examples: Example A: A 100-acre property is completely underlain by a…

The word “mineral” is used in a variety of contexts. Generally, ores of metals, coal, oil and natural gas, gemstones, dimension stone, construction aggregate, salt and other materials extracted from the ground are considered to be minerals. However, there is no definition of “mineral” that applies in every situation, and what is considered to be a “mineral” can vary from state…

Most states have laws that regulate mining and drilling activity. There are also laws that regulate the sale of surface and mineral property. These laws are meant to protect the environment and all parties involved in property transactions. These laws are the only protection available to buyers or sellers on issues that are not specifically…

When buying property in areas of potential or historic mineral development, a buyer should determine if a fee simple estate is being purchased or if ownership will be shared with others. Mineral rights transactions are normally a matter of public record, and copies of deeds or other agreements are filed at a government office. Real…

Many households in areas where mining or drilling takes place are outside of the service of public water supplies. These property owners rely on water wells for the production of their water. When underground mining occurs beneath a property, some subsidence and settlement should be expected. If the mine is below the aquifer tapped by…

Damage to the surface can be delayed. Subsidence of underground works or settlement of surface mined areas might not occur or be detected until decades after mining is completed. The owner of a fee simple estate should consider these facts before entering into a mineral rights sale or lease agreement. The consequences of mineral extraction…

Disputes between the mineral rights owner and the surface rights owner usually arise at the time of mineral extraction. These activities can require use of the surface and damage the surface owner’s enjoyment of the property. Here is where the wording of the mineral rights agreement or lease agreement becomes very important. The agreement may…

In addition to financial matters, a lease or sales contract can do more than simply specify the amounts paid to the owner. It can also contain language that protects the owner’s property and way of life while exploration, mining, drilling and production take place. The contract can set guidelines that protect the owner’s buildings, roads,…

A short story…. Two men were at the hardware store and in walks a guy who asks… “Have you leased your mineral rights yet? I’ll pay you $500 an acre – and write your check this morning.” One man grabbed the check and ran straight to the bar. The other man grabbed the lease and…