With new technologies and techniques bringing expansion of oil and gas exploration and production in the Mid-South, more landowners are being confronted with decisions about leasing their property — or with problems regarding ownership of mineral rights.
Monetary considerations aside, there are often concerns about potential environmental consequences of oil gas drilling/production, particularly the hydraulic fracturing (“fracking”) method of extracting natural gas.
“There is a lot of misinformation about this,” says James Isonhood, Mississippi assistant attorney general with many years of experience with the oil and gas industry, who spoke at a recent Mississippi Women for Agriculture “Lunch and Learn” program at Yazoo City.
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Making deals for mineral rights is a highly specialized, and serious, business, Isonhood says.
“If someone knocks on your door offering to buy your mineral rights, the first thing you need to do is find a lawyer who is knowledgeable about oil and gas mineral rights. Don’t use just any lawyer — be sure it’s one who has knowledge of and experience in dealing with the complicated issues in mineral rights.”
And even though you may own a piece of property, he notes, you may or may not have ownership of the mineral rights. In many instances of property sales over the years, the seller has retained ownership of the mineral rights.
“If someone else owns the mineral rights for your property — dominant estate — they have an absolute right to recover those minerals,” Isonhood says. “If you own the mineral rights and sell or lease them to an oil or gas company, that gives them dominant estate.”
Determining who owns mineral rights can often be a challenging and complicated process, he says. “You may have to go all the way back to the original patent in the 1800s.” When a property is inherited, he says, it’s usually on an as-is basis — if the decedent owned the mineral rights, then ownership will transfer to the heirs; if not, then the rights belong to whomever they were sold.
If there are several heirs to a property, getting them all together and agreeing on a course of action can be much like herding cats. He emphasizes again: It’s important that you get the services of a knowledgeable attorney early on.
Stanley D. Ingram, a Jackson, Miss., attorney with over 30 years experience in this area of the law, noted in a 2013 presentation to a Mississippi Bar Association seminar, that there is no such thing as a “standard” oil and gas lease form. “If there is one thing certain about today’s oil and gas lease, it is that it is uncertain. Every oil and gas lease is unique, requiring the utmost of the lawyer’s review and interpretation.”