Mineral Rights or no rights?

[Dougw133]

I am a young buck (27) grew up in Northeast PA not far from Dimmock that was featured in the film "Gasland". I have only been gone for about 4 years living in Philadelphia. Pretty sure i was the only one in Philly who mowed their lawn with a Husqvarna YTH23V42LS tractor. Needless to say after working for the Philadelphia Fire Dept. for the years, the woods were calling and I decided we had saved enough for a house on some land back up north. We've been back since June 2011 looking for homes. To our major disgust the real estate market here has become a mineral rights nightmare. Every owner trying to sell surface rights only and no buyers willing to do so. I figured if we were patient we'd find one. NOT true. We have our eye on 2 properties both with homes on them. One is 8 acres we made an offer on but now the owner discovered he didnt own the rights either, BUT he is "quieting the title" which means the title is so dated he can erase the cloud on it. Now he thinks he wants to retain a percentage and we said no. Another property is 20 Acres in the Heart of the gas drilling. The owner owns everything and the mineral rights. He originally stated they were to keep the rights but now says he is willing to negotiate.

Question is at this point is it worth it to just assume we won't find much with mineral rights included? Would negotiating a percentage of the rights be worth it or just not a good idea? The only rights we find are on much smaller parcels such as 1 acre, and it's just not enough land/privacy for us. We aren't looking to get rich, we just want our land for us. We don't want anyone plowing a road through making thousands off of our (or what we feel is our) property. Any suggestions?

 

[forgeblast]

Hay dougw133, i am right down the road from you. Much of the land has the mineral rights leased. Much i mean pretty much all of it. Being that they are drilling like crazy you can probably drive past 10-20 wells in that area alone you can see why owners want to keep part of the percentage. The way the gas leases were written, and especially the early ones, they are active anywhere from 5-10 years. Then they will revert back to the owner and you can keep them out. But if it has a lease now on the property they will be able to put a gas pad on it.
If you can find a property with out a leases(good luck) that would be the way to go, if not look outside dimock maby closer to brooklyn area, or start talking to real estate owners. I think shamrock auctions has a few houses coming up that the leases go with the property.
Welcom back.
Youll notice things have changed a bit.

 

[Storm56]

If I were in your shoes I would forego the sub surface rights and try to negotiate an agreement where you own the surface rights. With the horizontal drilling technology it is not necessary to disturb a surface area to extract the gas.

With that said you must be sure to have some say in the event your water gets contaminated, if you are not part of the lease you may be out of luck in getting the gas company to help you deal with a contaminated well.

 

[tallyho8]

Please explain "BUT he is "quieting the title" which means the title is so dated he can erase the cloud on it."

I have never heard of this. I own property without mineral rights and a very dated title. Is it possible to get the mineral rights restored?

 

[greasemonkeyok]

Tallyho8, you might first try to find the information from one of the mineral/royalty owners associations in your state. Different states probably have different rules.

Unfortunately for Dougw133, the old saying in producing states is "the meek shall inherit the earth; but the strong keep their minerals."

 

[tallyho8]

Since my father homesteaded the property and the gov't held the mineral rights, I doubt that we could ever get them back.

 

[forgeblast]

What problem he will be running into is that
1. there is a lease in place, that transfers if it is sold, the gas companys do not have to
redo any lease.
2. the original owner has already recived a signing bonus and now wants part of the royality.
3. The original owner wants (i would think) him to pay more if he holds all the royality %.
I would make sure I held all royality % if I had to I might make it on a timescale where
lets say the royality is the 12.5%, then when you buy the property its 50-50, next year 60-40, etc...until you have it all.

 

[two_bit_score]

Since my father homesteaded the property and the gov't held the mineral rights, I doubt that we could ever get them back.

La. Is very different than many states in that the mineral rights can be severed but if they don't go into production (held by production) then they can revert back to the property owner. Trick is that a lot of transfers could have occurred between when they were originally severed and now. More than one person has expected to regain the mineral rights on property in La. Only to find that they are part of an old lease that is hbp.

 

[Dougw133]

What problem he will be running into is that
1. there is a lease in place, that transfers if it is sold, the gas companys do not have to
redo any lease.
2. the original owner has already recived a signing bonus and now wants part of the royality.
3. The original owner wants (i would think) him to pay more if he holds all the royality %.
I would make sure I held all royality % if I had to I might make it on a timescale where
lets say the royality is the 12.5%, then when you buy the property its 50-50, next year 60-40, etc...until you have it all.

I looked at the 20 acre property again to day and im just not comfortable with it. It's a decent property but mostly wooded sloping downward. There is a lease in place and what would happen I found out is that if something happened on the property it would be up to the original lease signer to pursue damages. Doubt they'd care across the country sitting on royalties. Think im just going to wait and see.

 

[Dougw133]

Please explain "BUT he is "quieting the title" which means the title is so dated he can erase the cloud on it."

I have never heard of this. I own property without mineral rights and a very dated title. Is it possible to get the mineral rights restored?

What happened here is back in the days of coal the companies bought up all the rights and most of those companies now do not exist.The title sits in their name but are idle. You can basically sue the company that doesn't exist anymore for a quiet title. It's not as clean as straight up mineral ownership but it's better than nothing.

 

[greasemonkeyok]

Dougw133, ask a lawyer if the seller can assign all the rights under the lease pertaining to the surface rights to you, and just keep with ever rights he wants in the royalty.

You might also ask about the seller keeping the lessor's rights under this lease, but you getting everything after the lease expires.

 

[two_bit_score]

Dougw133, ask a lawyer if the seller can assign all the rights under the lease pertaining to the surface rights to you, and just keep with ever rights he wants in the royalty.

You might also ask about the seller keeping the lessor's rights under this lease, but you getting everything after the lease expires.

The new owner will have the surface rights in the property. That is what generally is transferred when mineral rights are retained. But, your point about checking out the lease terms is valid, absolutely.

Royalty rights can be sold separate from the full mineral rights. That is, the seller accepts money now for what royalties he might receive in the future from his lease.

On the second issue, generally, if the property is sold even with the full transfer of the mineral estate the lease still stays in place unless it s also specifically transferred to the new buyer. So the seller could actually still benefit from the lease if production is commenced anytime within the term of the lease. Once production starts the lease stays in effect as long as production is profitable to the O&G company. That could be generations.

Check with a knowledgeable lawyer in your state.

 

[johnrex62]

It will vary greatly depending on state laws. When I was still holding a real estate license back in the 80's there was a lot of ruckus in Texas about the state trying to pass a law that appropriated all mineral rights to the state.

I don't understand the concept of the state legally obtaining property rights from private owners without compensation or eminent domain enforcement, but I think I had someone tell me it passed and was now law. I have never had any interest or motivation to deal with it, so have not verified the information.

Others have mentioned their states have done similar things, so it may be a moot point in the long run. Run it by a knowledgeable real estate attorney with a practice in oil/gas or mining properties.

 

[two_bit_score]

It will vary greatly depending on state laws. When I was still holding a real estate license back in the 80's there was a lot of ruckus in Texas about the state trying to pass a law that appropriated all mineral rights to the state.

I don't understand the concept of the state legally obtaining property rights from private owners without compensation or eminent domain enforcement, but I think I had someone tell me it passed and was now law. I have never had any interest or motivation to deal with it, so have not verified the information.

Others have mentioned their states have done similar things, so it may be a moot point in the long run. Run it by a knowledgeable real estate attorney with a practice in oil/gas or mining properties.

In Texas there is a difference in the way coal is treated and oil, gas and hydrocarbons are treated but I have never had any specific dealings with lignite coal rights.

All the OG&M leases I've seen specify "oil, gas and other liquid hydrocarbons" as the subject of the lease. Sulphur is usually also mentioned but not coal for some reason.

There are some good sized lignite mines in Robertson and limestone counties and also near Tatum in east Texas. So maybe some one can chip in and tell s how those work in their leases.
.

 

[forgeblast]

Land Owners and Oil and Gas Leases in Pennsylvania

 

[Ken]

Please explain "BUT he is "quieting the title" which means the title is so dated he can erase the cloud on it."

I have never heard of this. I own property without mineral rights and a very dated title. Is it possible to get the mineral rights restored?

Talltho8 There is a web site for Arkansas property ownership that has been returned to state for non taxes.
You need to have a accurate description of title and where it is recorded by court house # if possible.
There is a man named Jerry Bradshaw that I have had contact with.
jbradshaw@cosl.org
In subject line re= property (give section Township and range) and ask for information and procedures to reclaim.
I don't have the telephone # but this group is very helpful in the information and is a state run program.
When I last had contact with you had understood the minerals were sold. not returned to state for back taxes. unless some one else has filed and paid your taxes you should of been contacted by registered letter if they tried. Good luck and hope you can get returned mineral rights. worth about 6K per acre. if any activity in area. Know of oil close by.
ken

 

[tallyho8]

Ken, thanks for the info. I have contacted the COSL on this matter and am awaiting their answer. Evidently Mr Bradshaw doesn't work there anymore because his email came back and so I resent it to others there.

My father homesteaded this land in the 1930s and the government reserved the mineral rights so it probably isn't possible to get them back from the government but it won't hurt to try.