Buying Land Without Mineral Rights

When you buy land, you may assume that you own everything on and below the surface. However, in many cases, the rights to the land are split into two categories: surface rights and mineral rights. Understanding the difference is essential, especially when it comes to oil and gas resources.

• Surface Rights: These rights give you ownership of everything on the surface of the land. This means you can use the land for farming, building a home, or any other surface activity. You control the surface but do not automatically have rights to the minerals beneath it.
• Mineral Rights: Mineral rights, on the other hand, grant ownership of the valuable resources below the surface, such as oil, gas, coal, or other minerals.  The mineral owner does not have any ownership or decision making ability on what happens on the surface.

Mineral owners have the right to lease their mineral rights to an oil and gas operator.  While this may seem problematic to the surface owner, we’ll explain later why it may not matter.

The key takeaway is that owning the surface does not always mean you own what lies beneath.

One of the most significant downsides to buying land without mineral rights is that you won’t financially benefit from any drilling oil and gas royalty income generated from the mineral rights beneath your property. If oil, gas, or other valuable minerals are found beneath your land, the owner of the mineral rights — not you — will receive any profits from extracting these mineral rights.

Additionally, you might still face some minor inconveniences or the potential for future development related to the minerals without gaining anything in return. This lack of financial upside is one of the biggest reasons why many buyers prefer to own both surface and mineral rights when purchasing land. Without the mineral rights, you have no control over, and no benefit from, the wealth beneath your property.

Yes, you absolutely can (and should) buy land without mineral rights!

In fact, in places like Texas, it’s extremely common to not own the mineral rights. Over 90% of the time in areas rich in oil and gas, the mineral rights were severed from the surface rights long ago. This means that even if you don’t own the minerals beneath the land, buying the surface is still a perfectly normal and acceptable transaction.  If you are in an area that has a lot of oil and gas production, finding land that includes both surface and minerals will be nearly impossible.

In Texas and many other oil-producing states, mineral rights are often treated as a separate legal entity from surface rights. They can be sold, transferred, or retained by previous owners, while the surface can be sold to someone else. For most buyers, owning the surface is all they need — especially if their main interest is in using the land for farming, building, or recreational purposes.

Even without the mineral rights, you still have full ownership of the surface and control over how you use it.

The reality is that millions of landowners in Texas and other energy-rich states buy property without mineral rights, and it doesn’t prevent them from enjoying or utilizing their land as they intended. Unless there is already active drilling on or near the land, the lack of mineral rights typically doesn’t affect everyday use for most buyers.

For most landowners, the benefits of surface ownership outweigh the concerns about not owning the minerals beneath.

Are you in the middle of a purchase and the current owner wants to keep the mineral rights?

If the current seller wants to complete a transaction where mineral rights do not convey, this should not be a deal killer.  If anything, you can use this as a point of negotiation.

In many cases, owners who still have the mineral rights only still have the mineral rights because they are worth nothing.   If they had value, they would have been severed from the land long ago.  This means that the current owner is trying to hold onto mineral rights that might be worth $0.  There is no reason not to purchase land without mineral rights if the mineral rights are worthless.

Tip: Use our mineral rights value calculator to estimate value.  To get a more accurate estimate on value, check with a mineral rights broker and see what their opinion of the value might be.

If the seller wants to convey the ownership with a mineral rights do not convey clause, ask them the following questions:

1. Do you currently receive royalty income?
2. Are your mineral rights currently leased?

If the answer to both of these questions is no, there is a 99% chance the mineral rights have no value.

Even if the owner does receive royalty income or has an active lease, letting them keep the mineral rights is not a negative for you.  The mineral rights have their own value, and they shouldn’t simply be given away for free with the land.

Our number one tip for buying land without mineral rights is to pay a price for the land you are happy with.  The mineral rights are an added benefit, that have nothing to do with owning and enjoying the land.

Another tip, if you are purchase a property that has a lot that is a half acre or smaller, this is not a significant amount of acreage and owning the mineral rights is never going to make you rich.  It might give you a small windfall, but worrying about the mineral rights on small lots is not worth the stress and hassle.

If the seller adds a mineral rights do not convey clause, simply use that to try and get a minor price reduction.

If the seller wants a mineral rights do not convey clause, and you are buying land without mineral rights, what does this mean for you as the surface owner?

Understanding your rights as a surface owner is important.

The #1 concern we hear from people buying land without mineral rights is that an oil and gas operator is going to place a rig on their property and they will have no control over it.  That is not how it works!

When you own the surface, you have full control over what happens on the surface.

If you are buying land without mineral rights, there is no risk that an oil and gas operator is going to show up one day and put down a rig no your property.  The mineral owner can give the operator the rights to extract their oil and gas, but they do not have the authority to let an operator use your surface rights.  Once the operator has secured the rights to the minerals beneath the surface, they must then negotiate deals with surface owners on where to place the rig, roads to access the rig, etc..  All of these negotiations happen directly with surface owners, not mineral owners.

Keep in mind that when a rig drills a well, that move horizontally underground over 1 mile to extract that oil.  There could be a rig over a mile away from you that is extracting oil beneath your property and you would never know it was happening.

Biggest Risk Buying Land Without Mineral Rights

The biggest risk you face buying land without mineral rights is what neighboring surface owners decide to do.  You do not have any control over what your neighbor does with their land.

If you are buying land that has a house, and that house sits right next to your neighbors property line, take a moment to consider the possibility they could let a rig drill on their acreage and you would now have a rig next door.  There are still rules on how far away from your home they need to be, but if there is a lot of open space right next to you that you don’t own, it might be worth having a chat with the owner to get their thoughts on what they would allow.

While there is a risk here, the risk is still very low.  In many cases, the concern about buying land without mineral rights is overstated, and it is perfectly fine.

When you purchase your property, there is a deed that is publicly filed.  Pull up your deed and look for specific language that states:

“Grantor hereby reserves unto itself, its heirs, successors, and assigns, all rights, title, and interest in and to any and all oil, gas, and other minerals of every kind and character in, on, under, or that may be produced from the property described herein.”

The language may vary slightly, but language like this shows that the owner who sold you the surface reserved the mineral rights for themselves.

If you don’t see this language in the deed, does it mean you own the mineral rights?  NO!

Just because the previous owner did not reserve the mineral rights, it does not mean that you own the mineral rights.  What it means is that the person who sold you the surface, sold you everything they owned (including mineral rights), but if that person did not own minerals to begin with, no mineral rights conveyed to you.

In many cases where mineral rights have value, the minerals were reserved long ago.  As a property transfers ownership from one person to the next, there is no reservation language because there was nothing left to reserve.

How can you determine if you own the mineral rights to your land?  The only way to know for sure is to hire a landman and have them run title. A landman will look back at the property ownership from patent title to present, and determine if the mineral rights were ever reserved.

Keep in mind that spending a couple thousand dollars to run title and prove you own the mineral rights is not worth if the mineral rights value is too low.

Another common question from land owners is whether they can buy the mineral rights to their land.

A lot of land owners feel uneasy that they don’t own the minerals, and want to make their ownership “complete” and want to buy the mineral rights to have complete ownership.

To buy the mineral rights to your land, you would need to pay a landman to track down the current owner, then approach this owner who may be an individual or business and request to buy them.  There is a high probability that whoever owns the mineral rights to your land has no desire to sell them.

The realistic answer here is that it is simply not possible.  Unless you’re willing to pay significantly more than market value for mineral rights, it would be difficult or impossible to buy the mineral rights.

If you have questions about buying land without mineral rights, contact us.  If you provide us with the location of your land, we can tell you whether there is any oil and gas production there and whether the land has any value from a mineral rights perspective.