Texas Mneral Laws

[Caustic Burno]

Is it just me or are these just nuts. If you own the land you should own the mineral rights.
Now they are drilling everywhere around us, and if they decide to drill there is nothing you can do if they decide the spot is on" your land ". How can a mineral owners rights supercede that of the surface owner.
All the mineral rights in this county are owned by the old time families and law firms that bought them up from families during the depression. Just seems it would be a lot simpler if there was one owner you own the land and mineral. Neighbor has two wells on his place and doesn't get anything after they tell you what they are going to pay for surface rights which isn't much. He has lost ten acres to well sites from production out of his pasture.
If they decide the spot is in the middle of your hay field that is were it goes.

 

[john250]

A lot of mineral rights in Appalachia were bought up by "big money" in the days when that meant mining coal underground. Time passed and powered shovels made strip mining possible. I'm not an authority on the history of this but I think some surface owners lost everything. I guess they still had whatever was left after the coal was removed.
Lawyers surely invented this separation of mineral rights from the physical land. More than a few have made a good living argueing these cases.
I was once advised by a man in Californias Central Valley to become a water rights attorney if I wanted to make lots of money.

 

[Lammie]

I don't know, but we have relatives in Oklahoma and they can't believe that we actually do own the mineral rights. I guess not a lot of folks around that part of the state don't.

Where is it around here that there was a lawsuit over that??? Weatherford?

 

[TexasBred]

Is it just me or are these just nuts. If you own the land you should own the mineral rights.
Now they are drilling everywhere around us, and if they decide to drill there is nothing you can do if they decide the spot is on" your land ". How can a mineral owners rights supercede that of the surface owner.
All the mineral rights in this county are owned by the old time families and law firms that bought them up from families during the depression. Just seems it would be a lot simpler if there was one owner you own the land and mineral. Neighbor has two wells on his place and doesn't get anything after they tell you what they are going to pay for surface rights which isn't much. He has lost ten acres to well sites from production out of his pasture.
If they decide the spot is in the middle of your hay field that is were it goes.

Sad but true CB. Some oil companies are a bit more generous when negotiating a wellsite payment and the same for pipeline companies. I don't remember the exact time frame but in Louisiana I believe a person can sell land, reserve the minerals and IF there is no production from the minerals within a certain number of years (7 maybe), the minerals automatically become the property of the surface owner. I've bought minerals from folks but they also owned the surface rights and were willing to sell the minerals.

 

[Brute 23]

When you buy land you have to know the laws. Same thing can happen with utility easements. You sign the note, make sure you know what you are getting into. The leases do say that the land has to be returned to the original condition. For what ever that is worth :secret: . Document every thing before they come in.

As I have said before, I kind of deal with this from all aspects as a land owner, mineral owner, work in the oil field, and a small family owned oil company. My advice is if at all possible try to know you mineral owners and keep on good terms. We own property with minerals that we do not own the surface just because of it being divided from generation to generation. We go to bat for our surface owners and require the same standards as the leases on our property where we own both surface and minerals.

Working in the oilfield I have seen quite a few people effected by drilling. It can change the landscape or use of the property. Most companies are willing to work with the surface owner as much as possible. I have also seen surface owners or leasees try to abuse that.

If all else fails, know the rules O&G Companies have to follow according the Rail Road Commission. Get to know the RRC person in you area and keep their number handy. You can make it a real nightmare for a company. If they have any sense, they will find out its cheaper to try to work with you than the RRC. ;-)

 

[backhoeboogie]

It can get complicated. The land I live on had 50% mineral reserves for 35 years and then they went to the owner. It was strange. I got half the minerals sometime in the 90's.

Grandaddy paid off some notes for folks who were about to lose property back in the depression. They would have lost their property and minerals to the banks. Grandaddy bought the notes for the minerals and let them keep the farms. It seemed like a win win at the time but now the future generations don't like the situation. I'm okay with it (Haynesville shale area)

I bought out some sibling's inherited land with the agreement they keep their minerals. Bought another piece of ground in July without minerals. I knew these things going in. That's just how it is.

It has gone both ways for me.

What does annoy me is the kids who could not wait for their parents to kick the bucket and sold the family farm as soon as they could (and did not make reservations). Then all this shale gas came along and they are crying foul. Those new cars and boats the spent their money on depreciated away.

What is wonderful is to see these farmers who have been living on next to nothing all these years benefit from mineral rights.

 

[TexasBred]

Don't worry too much about Texas farmers....90% of them are nothing more than insurance farmers anyway.

 

[hurleyjd]

One solution is to tax the minerals if it has value then tax it. Now it is only taxed when it produces. Does not cost nothing to separate the minerals and keep it for ever without paying taxes on it. Value it and pay taxes just like they do on the surface owners property. If the mineral owners paid a tax then they would be more hesitant about keeping the minerals.

 

[bigbull338]

buying land without some mineral rights is crazy.but alot of smart people will not sell land with any mineral rights.when we would buy land we would want half the mineral rights in the deal.an let the seller retain the rest for like 50yrs or at their death they come to us.but in all honesty we was dealing with family members.heck we even bought some land an mineral rights that they was drilling an oil well on at the time.

 

[TexasBred]

One solution is to tax the minerals if it has value then tax it. Now it is only taxed when it produces. Does not cost nothing to separate the minerals and keep it for ever without paying taxes on it. Value it and pay taxes just like they do on the surface owners property. If the mineral owners paid a tax then they would be more hesitant about keeping the minerals.

Until minerals are produced they have no value. As far as you know there is nothing but dirt under the property and that's already being taxed.

 

[Caustic Burno]

One solution is to tax the minerals if it has value then tax it. Now it is only taxed when it produces. Does not cost nothing to separate the minerals and keep it for ever without paying taxes on it. Value it and pay taxes just like they do on the surface owners property. If the mineral owners paid a tax then they would be more hesitant about keeping the minerals.

Until minerals are produced they have no value. As far as you know there is nothing but dirt under the property and that's already being taxed.

They get there money if it produces. Right at 50% in taxes.

 

[TexasBred]

One solution is to tax the minerals if it has value then tax it. Now it is only taxed when it produces. Does not cost nothing to separate the minerals and keep it for ever without paying taxes on it. Value it and pay taxes just like they do on the surface owners property. If the mineral owners paid a tax then they would be more hesitant about keeping the minerals.

Until minerals are produced they have no value. As far as you know there is nothing but dirt under the property and that's already being taxed.

They get there money if it produces. Right at 50% in taxes.

50% tax on royalties????? Wow that's awful. I guess it's done differently in different counties but on all my production the taxes are based on prior years production from oil and gas produced from under that particular parcel of land and the rate is really very reasonable. As production goes down the taxes go down.

 

[Caustic Burno]

Reasonable as they are reported on 1099-C and this income is taxed to death. You have to pay self employment tax on this as well as whatever tax bracket you fall in. I'm confused as what my CPA says I owe every year.


PS that is not counting the ad valorem tax collected by the county for the hospital, school and county.

 

[1982vett]

Reasonable as they are reported on 1099-C and this income is taxed to death. You have to pay self employment tax on this as well as whatever tax bracket you fall in. I'm confused as what my CPA says I owe every year.


PS that is not counting the ad valorem tax collected by the county for the hospital, school and county.

Why Schedule C? Corporate ownership of farm? .... I think the general landowner files on Schedule E...Rents and Royalties. I know we do. Schedule E us unearned income and does not pay self employment tax. Can't use the income to fund an Ira or Roth IRA either.

 

[Caustic Burno]

Reasonable as they are reported on 1099-C and this income is taxed to death. You have to pay self employment tax on this as well as whatever tax bracket you fall in. I'm confused as what my CPA says I owe every year.


PS that is not counting the ad valorem tax collected by the county for the hospital, school and county.

Why Schedule C? Corporate ownership of farm? .... I think the general landowner files on Schedule E...Rents and Royalties. I know we do. Schedule E us unearned income and does not pay self employment tax. Can't use the income to fund an Ira or Roth IRA either.

Has to do with the land and mineral rights were bought under my Great Grandfathers and his brothers Company.
From the early 1900's they had a Oil field Construction/Production company. They were active in the Saratoga, Sour Lake, Goose Creek, and Barbers Hill fields. They bought land all over, before they all died they ended up selling the land but retained a portion of the minerals, and that varies for some unknown reason from tract to tract.

 

[TexasBred]

Has to do with the land and mineral rights were bought under my Great Grandfathers and his brothers Company.
From the early 1900's they had a Oil field Construction/Production company. They were active in the Saratoga, Sour Lake, Goose Creek, and Barbers Hill fields. They bought land all over, before they all died they ended up selling the land but retained a portion of the minerals, and that varies for some unknown reason from tract to tract.

CB....first paying job I had was construction in the Saratogo, Sour Lake and Evadale area. I can still smell that paper mill in Evadale and the biggest blackest mosquitos I have ever seen before or since.

 

[Caustic Burno]

Has to do with the land and mineral rights were bought under my Great Grandfathers and his brothers Company.
From the early 1900's they had a Oil field Construction/Production company. They were active in the Saratoga, Sour Lake, Goose Creek, and Barbers Hill fields. They bought land all over, before they all died they ended up selling the land but retained a portion of the minerals, and that varies for some unknown reason from tract to tract.

CB....first paying job I had was construction in the Saratogo, Sour Lake and Evadale area. I can still smell that paper mill in Evadale and the biggest blackest mosquitos I have ever seen before or since.

Everyone needs to get a glass of water in Sour Lake. You have to hold your nose to drink it. I have seen some of those skeeters stand flat footed and breed turkeys.

 

[1982vett]

Reasonable as they are reported on 1099-C and this income is taxed to death. You have to pay self employment tax on this as well as whatever tax bracket you fall in. I'm confused as what my CPA says I owe every year.


PS that is not counting the ad valorem tax collected by the county for the hospital, school and county.

Why Schedule C? Corporate ownership of farm? .... I think the general landowner files on Schedule E...Rents and Royalties. I know we do. Schedule E us unearned income and does not pay self employment tax. Can't use the income to fund an Ira or Roth IRA either.

Has to do with the land and mineral rights were bought under my Great Grandfathers and his brothers Company.From the early 1900's they had a Oil field Construction/Production company. They were active in the Saratoga, Sour Lake, Goose Creek, and Barbers Hill fields. They bought land all over, before they all died they ended up selling the land but retained a portion of the minerals, and that varies for some unknown reason from tract to tract.

Thanks for the explanation.

 

[Caustic Burno]

Out of the three brothers I think the great uncle was the real brains behind the company, he was a commodities trader. They built derricks had a labor gang, supplied the old mud hog pumps, boilers and other heavy equipment for drilling. I have a bunch of really neat old pictures of the Goose Creek and Barbers Hill fields.