Mineral Rights
Let’s Talk about Mineral Rights
What are mineral rights?
Real property can be divided into two parts: surface interests and mineral interests. In North Dakota, mineral interests mean an interest in the “oil, gas, coal, clay, gravel, uranium, and all other minerals of any kind and nature.”
How do mineral rights work?
Minerals can be “severed” from the surface by reserving minerals when transferring land. This means that the same party does not necessarily have to own both the surface of a piece of land as well as the minerals. In fact, it is very common in North Dakota for one party to own the surface and many other parties to own the minerals.
How long do mineral interests last?
Mineral interests last indefinitely as long as they are not abandoned. Minerals are considered abandoned when they have not been used or claimed for twenty or more years. Minerals are “used” when some type of activity such as production, leasing, or conveying occurs under North Dakota law.
A mineral interest owner can also assert their ownership by recording a document known as a Statement of Claim. This protects the mineral interests from being deemed abandoned, even if they are unused, for up to twenty years.
Can mineral interests be lost?
As discussed above, if mineral interests are unused or unclaimed for more than twenty years, they are considered abandoned. A surface landowner can initiate a court action to gain ownership of abandoned minerals under their land. Mineral owners do have the opportunity to respond to this action; however, in many cases, the rightful owners of mineral interests might not even be aware of their existence.
Searching for mineral rights records
Clients often are unsure what mineral rights they or their family might own. When this occurs, we work with the client to search for recorded deeds or other mineral rights records to help shed light on the situation. Sometimes we also enlist the assistance of third party landmen to help us out and search for mineral rights records in various counties throughout North Dakota or even perform mineral title opinions to determine exactly who owns what and how much.
The value of mineral rights
We also turn to landmen for assistance when a client wants to know the value of mineral rights. We often need to determine the value of mineral rights for an estate during the probate process. Landmen examine where the minerals are located, how much the client owns, the price of oil, and other factors in order to provide us with an appraisal of the their value.
How can I get mineral rights?
For a surface owner, the court action for abandoned minerals discussed above is one option to obtain mineral rights. Many are passed down through families, either deeded directly or obtained through the probate process.
What if I’m not a surface owner and my family doesn’t own minerals—can I buy mineral rights?
It is absolutely possible to purchase mineral rights if you are able to find an owner who is selling! Many individuals recognize the value of minerals and so it can be challenging to find mineral rights for sale, particularly in the highest oil-producing counties in western North Dakota. Nevertheless, it is absolutely possible to purchase them.
What if I want to sell my oil rights?
Again, many people recognize the value of mineral rights and if your minerals are in a prime producing location, you could very likely find interested buyers. The sale or purchase of mineral rights can be handled similarly to the sale of any other real property.
The first step is to confirm exactly what you own—you do not want to inadvertently sell something that is not actually yours! A mineral title opinion and appraisal would be a good place to start: this process will tell you exactly what you own and what it is worth. You could then proceed with a purchase agreement and, finally, you would sign a deed, conveying your mineral interests to the buyer.
What is a mineral deed?
A mineral deed is very similar to any other deed for real property but, instead of conveying surface property, it conveys the mineral interests below the listed legal description. A mineral deed conveys the “oil, gas, coal, clay, gravel, uranium, and all other minerals of any kind and nature” from the Grantor (current owner) to the Grantee (new owner).
Because there can be many different owners of the minerals in the same legal description, a mineral deed can only transfer whatever interests are owned by the Grantor of the deed.
This is a lot to understand—can you help me?
Absolutely! Mineral rights can be very challenging—we’re here to help.
Whether you need to protect minerals you already have, find out if you do have minerals, or buy, sell, or convey minerals, we can point you in the right direction.
We have successfully helped clients with their mineral interests located all throughout North Dakota. Please feel free to give us a call at 701-852-5224 to find out how we can be of assistance!