Selling Texas land: what to do about the mineral rights

Do mineral rights go with the land when you sell?

Yes, unless you or an earlier owner kept them. Texas treats land as two estates, the surface and the minerals, and they can be owned together or by different people. The Railroad Commission of Texas states the default rule plainly: if a seller doesn't limit the sale to the surface only, or clearly keep the minerals, the mineral interest the seller owns is included in the sale.

So every sale falls into one of three situations:

• You own the minerals and say nothing. They pass to the buyer with the land.
• You own the minerals and reserve them. You keep all or part, and the deed says so.
• Someone separated them before you. An earlier owner sold the surface and kept the minerals, or sold the minerals on their own. You can only sell what you own, which may be a fraction or nothing.

In TREC's standard mineral addendum, the "Mineral Estate" covers oil, gas and other minerals, royalties, the right to sign leases, lease payments, and the right to use the surface to develop them. It excludes water, sand, gravel, limestone, caliche and similar surface materials, although it includes reasonable use of those materials for drilling and mining.

How to check whether you own the minerals

You piece the answer together from the records:

1. Read your own deed. Look for "save and except," "reserves," "surface only," or a fraction of the minerals.
2. Trace the chain of title in the county clerk's deed records, deed by deed. Each owner who reserved a share took it out for good, and fractions can stack up over several generations.
3. Check the appraisal district. Texas taxes minerals in place as real property, and producing oil and gas interests are valued from their production. Where there's a producing well, the appraisal district usually lists mineral accounts under each owner's name, so search yours. Royalty checks or a division order from an operator are strong evidence too.
4. Look at the Railroad Commission's public GIS map for wells, permits and pipelines on or near your land. The Commission regulates drilling, but it doesn't decide who owns minerals or who gets paid royalties.
5. Ask a title company, knowing the limit. Texas title policies can include a mineral exception or exclusion approved by the Texas Department of Insurance, so a title commitment usually won't settle who owns the minerals.

TREC's mineral addendum says it directly: a full title examination by an attorney with expertise in this area is the only proper way to determine mineral title with certainty. If real money depends on the answer, a landman can run the records and an oil and gas attorney can give a title opinion.

Your options: keep, share or sell the minerals

Timing matters too. Once you sign TREC's unimproved property contract, you can't create a new lease, amend an existing one, or convey any interest in the property without the buyer's written consent. If a landman calls with a lease offer mid-sale, talk to your buyer first.

What the TREC mineral addendum (TREC 44-3) covers

TREC's land contracts say any reservation of oil, gas or other minerals is made through an attached addendum. The standard one is the Addendum for Reservation of Oil, Gas, and Other Minerals (TREC 44-3), and it's only used when the seller keeps all or part of the minerals. It does four things:

• Defines the Mineral Estate, as described above.
• Sets how much you keep: all of the Mineral Estate you own, or an undivided fraction of it. If you own only part of the minerals, the fraction applies to your share.
• Settles surface rights. You check whether you do or don't waive your right to enter and reasonably use the surface to develop the minerals. Leaving it blank counts as conveying those surface rights to the buyer. Your choice doesn't affect surface rights held by other mineral owners or existing lessees.
• Passes on lessee contacts. If you don't reserve all of your interest, you give the buyer current contact details for any existing mineral lessee you know of, within 7 days after the contract's effective date.

The contract itself also asks whether you're a party to an existing oil and gas, mineral, water or wind lease, and whether you've given the buyer copies. The addendum warns that splitting off pieces of the mineral estate can have unintended consequences and that precise language is essential. Have a Texas attorney with oil and gas experience review the reservation and the deed before you sign.

Executive rights and royalties in plain English

A mineral interest is a bundle of separate rights, including the right to use the surface to develop it, and Texas lets owners split the bundle. The pieces sellers deal with most:

• Executive right: the right to sign an oil and gas lease. Whoever holds it negotiates with the oil company.
• Bonus: the up-front payment for signing a lease.
• Delay rentals: payments some leases require to stay in force before drilling starts.
• Royalty: a share of production, or its value, paid when a well produces. The royalty owner doesn't pay for drilling the well.

A reservation can keep a royalty and pass the executive right to the buyer, or the reverse. Splits like that tie strangers together for decades, so the wording matters.

Can the mineral owner use the surface?

Yes, within limits. In Texas the mineral estate is dominant. According to the Railroad Commission, a mineral owner or lessee can use the surface as reasonably necessary to explore for and produce oil and gas, without the surface owner's permission, and without paying for damage that isn't negligent. Negligent, unreasonable or excessive use can make the operator liable.

The accommodation doctrine gives surface owners limited protection. As Texas A&M's agricultural law program explains it, the surface owner has to show three things: the operator's plans would substantially impair an existing use of the surface, the owner has no reasonable alternative way to continue that use, and the operator has reasonable alternatives under usual industry practice. It applies only in limited circumstances. The more practical protections are a negotiated surface use agreement, or owning the minerals yourself.

How reserved minerals affect buyers and price

Keeping minerals is common in Texas. How much it affects your price depends on who's buying:

• Buyers planning homes or a development worry about a well pad or road appearing later. Waiving surface rights in TREC 44-3 can ease that, though it can't bind other mineral owners or existing lessees.
• Buyers in active oil and gas areas may want at least part of the minerals, and a full reservation can cost you offers.
• Buyers where there's little drilling may barely care.

Say what you're keeping at the start, in your listing or first conversation. A reservation that surfaces late often reopens the price. If the minerals were separated before you owned the land, say that too. It's common in parts of the state, including much of North Texas.

How much are mineral rights worth?

There's no reliable per-acre figure for Texas minerals. An acre in an active drilling area and an acre in a county with no production are different assets. What drives value:

• Production. Minerals with producing wells are valued mostly on their royalty income. Unproduced minerals are valued on the chance of future leasing and drilling.
• How much you own. Your fraction times the acreage gives your net mineral acres. Half of the minerals under 40 acres is 20 net mineral acres.
• Lease terms. The royalty fraction in an existing lease, and whether the lease is still in force, set what you're paid.
• Location and activity. Nearby permits, new wells and operator activity, all visible on the Railroad Commission's map, move value more than anything else.

The appraisal district's value on a producing mineral account is a tax estimate built from production and the previous year's prices. Buyers won't treat it as a price. If you're offered money for minerals, get more than one offer and have an attorney review the mineral deed.

Relinquishment Act lands: when the state owns the minerals

Some Texas land carries a twist. Under the Relinquishment Act of 1919, as the courts have interpreted it, the State of Texas owns all the minerals in land it sold with a mineral classification between September 1, 1895 and August 21, 1931. The surface owner, called the "owner of the soil," acts as the state's agent for leasing the oil and gas.

According to the Texas General Land Office, the surface owner receives half of any bonus, rentals and royalty, as pay for acting as the state's agent and in place of surface damages. The GLO must approve every lease term, a standard state lease form must be used, and the surface owner owes the state a fiduciary duty. The statute is in the Natural Resources Code, Chapter 52, Subchapter F.

If your land falls into this group, you can't reserve or sell minerals the state owns, and the leasing role needs careful handling in the contract and deed. Check with the GLO and an oil and gas attorney before you sign.

Pipeline and power line easements on your land

Buyers ask about easements in the same breath as minerals. A recorded pipeline, power line or access easement runs with the land. It binds whoever owns the land next, and the buyer takes the property subject to it. In practice that means:

• They show up at title. Recorded easements appear as exceptions in the title commitment. Under the TREC contracts, the buyer gets copies of those documents and a window to object.
• They limit building. Easements often restrict structures on the easement strip, and the holder can usually come in to maintain its line.
• Location matters more than existence. A pipeline along a back fence line affects value far less than one crossing the best building site.
• Old easements can be vague. Some older pipeline easements don't fix a width or route, which makes buyers cautious.

Find them before a buyer does. Search the county deed records, check any old title policy, and look at the Railroad Commission's GIS map for pipelines. The Commission warns that its maps aren't a substitute for calling the one-call notification center (811) before anyone digs.

Texas also requires a seller of unimproved land that will be used for homes to give the buyer written notice of any transportation pipeline, such as a natural gas or petroleum line, before the contract binds the buyer (Property Code Section 5.013). The notice isn't required when the contract obliges you to provide a title commitment and lets the buyer terminate over uncured title objections, which the TREC contracts do.

An access easement across a neighbor's land works the same way and passes to your buyer. Our guide to selling landlocked land explains how access easements are created and recorded.

A checklist before you list

1. Get your deed and trace any mineral reservations in the chain of title.
2. Search the appraisal district for mineral accounts in your name.
3. Check the Railroad Commission map for wells, permits and pipelines.
4. Gather any leases, division orders and royalty statements.
5. List every recorded easement and where it crosses the land.
6. Decide what to keep, and whether you'll waive surface rights.
7. Have an oil and gas attorney review the reservation language.

If you're selling on your own, our guide to selling land in Texas without a realtor covers the TREC contracts and the notices Texas requires. If you'd like help, tell us about your land. We'll research it, including what the records show about minerals and easements, and if we agree on a price, a Texas title company closes the sale.