Mineral rights and subdivision

You probably need need to discuss this with a PA attorney. Mineral Rights severence rules can vary from state to state. But generally, I would think a reservation for the all the minerals lying beneath would be acceptable.

Are you sure you actually own the mineral estate?

I agree about getting qualified advice.

I believe you have to trace the chain of title back to the original land grant and check to see that there wasn't an EXCEPTION on a previous deed that got left off subsequent deeds.

Marc's correct, it varies from State to State.

In Oklahoma, a statement on the conveyance instrument like "SURFACE CONVEYANCE ONLY" takes care of it. I've also seen "LESS AND EXCEPT ANY MINERAL RIGHTS OR INTEREST".

Different states and all: but to retain mineral rights you would have to do that at the point of sale. If you don't reserve them, they are then transferred to the new owner automatically.

As far as a subdivision goes I would do it in the dedication, that would retain the minerals that you still have to you and heirs. Mineral rights and public ownership under dedicated roads have generated some interesting court cases. If you don't mention the reservation in the dedication, then you may be causing a very messy situation trying to retain them as you sell lots.

But I would do it in the dedication. Then for each lot that is sold.

I have followed it back to the original patent. Only one deed mentions (specifically) the Pittsburgh Coal Seam. Which would lead me to believe that I own everything else. But, of course I would get an attorney's opinion when the time comes.

There has been a moratorium on new sewer taps in place since I bought the property in 2001 (and before). It is a complicated story, but suffice it to say that if no flooding takes place on a downstream property (1 single house) about 3/4 mile away in a 5 year period, then the moratorium is lifted. I have a meeting coming up with the municipality to see what the status is. Actually, I am convinced that it is a stormwater problem, but since it manifests itself as water coming up through the basement floor drains in one house along the creek, they convinced the state that it is a sanitary sewer problem, even though the municipality put a backflow device on the lateral. The engineer in charge of the sewer system agrees with me, but their hands are tied by the state.

I really don't like dealing with attorney's, but I have a feeling I will be spending a lot of money on lawyers going forward. My daughter will be going to law school in Fall of 2015. Too late to help me:-(

Interesting article: Oil and Gas rights in PA

One major difference between Pennsylvania and other states is the Dunham Rule, which states oil and gas rights in the commonwealth are not included in general mineral rights. Oil and gas rights must be specifically spelled out.

then that's what I would do, under the dedication or certificate of owners found on most plats (again state to state differences) should be a dedication for streets, reservations for easements, and drainage and release and waiving homestead rights: then I would reserve the minerals that you retain and state that however it should be done in Penn.

I must warn you that if you want to subdivide here you will have to be very serious about it, cause you will need to install all your roads and utilities.

I would not wait until the point of sale, because at the time the plat is accepted you have granted away ownership interest in some of the subdivision and you begin to muddle the title a little for minerals, at least where I'm from so do it up front.

OK - I've got to ask ...

Why even consider with holding oil and gas rights? You've got a small parcel to begin with, drilling is not likely to take place in the foreseeable future, and even if it does happen your "share" would probably be so diluted as to make it a non-issue.

I know if I was a prospective buyer your with holding of oil & gas rights would probably make me walk away from the deal.

Is the potential return to you really worth all the trouble and risk?

OK - I've got to ask ...

With 10 acres, depending on the negotiating skills, you may get $1k at initial lease and perhaps as much as $5k per year of production. That is worth pursuing.

I'm throwing those numbers out there as a WAG (but based upon personal experience).

It is definitely worth pursuing.

I've seen the oil/gas reservations in many deeds in my area, which isn't even known to have ever produced a drop of oil. It was apparently common boiler plate language.

OK - I've got to ask ...

I would tend to agree, keeping mineral rights in a platted subdivision sounds like a recipe for not selling lots.

Holding the mineral rights will give you the right to enter the surface property and explore for minerals, oil and gas regardless of the harm you may do to the surface owner. With that right there is an obligation to return the surface to the condition it was in before you excised your rights. Then if your exploration justifies development, the same obligation is there to considered. Depending on the surface development and its value, returning it to the existing condition it was in when you exercised your rights, could make your mineral rights be a burden you don't want. Had such a case here, the mineral was basalt rock for gravel to be crushed and shipped out by barge on the river, the area was open fields. When the mineral rights holder went in to explore, the surface owner could not stop him but he could enforce returning the land to the condition it was in before the exploration was conducted, think there was some crop loss payments involved also and the subsurface owner so far has chosen not to develop a rock quarry under that field. If you really believe there is mineral value in that 10 acres, don't develop it and save it for your followers, if you develop it, let the mineral rights go with the land unless you want rights to something that might make it's recovery and the cost of returning to the surface owner what he had before you came along cost more than the gain from the minerals. Were I a surface owner and any mineral rights owner came along to recover his minerals, I would obtain a court order for a bond be obtained by the mineral rights owner, sufficient large enough to pay for the return my land to the condition it was in when the subsurface owner started the recovery of minerals.
jud

OK - I've got to ask ...

I agree Dave. 10 acres isn't that big, and then to split it even further really does nothing but negate the saleability, and increase your liability for property you don't even own anymore. Who knows about permitting, access, sales of the product? Talk to a good geologist in the area who does that stuff for a living. In my home state of MI you need 40 acres, or 160 acres for a gas well. Not sure about AZ, as I tend to avoid that stuff. Too much paperwork and the EPA is seriously out of control

Me, I'd just sell it, be done with it and move on to another project. Let the buyer deal with the minerals, or lack thereof.

Hi John. 'Tis not a problem for us in SA as the land owner does not own the minerals or gas below the surface! Furthermore if your property included in a pegged claim the mineral claimant has right to enter, explore , drill and mine. Only $$$ consideration for inconvenience and remedial work . ie No royalty payment for extracted mineral.

RADU

Jud, the oil/gas is typically very deep and they do not require surface access due to the horizontal drilling associated with the fracking process. You can also stipulate in the lease agreement that no surface disturbance occurs.

Never underestimate the value of mineral value.

It is all about volume and production amounts and your lease agreement.

There are standard leases forms and then there are the ones that scream "I must lease your minerals"

Depending upon pooling and unit regulations, a one acre mineral rights can position themselves into an ideal bargaining value as a holdout.

" Never underestimate the value of mineral value."

Exactly right. We saw land worth $800-$1500 per acre, lease for $1500-$5000 per acre for minerals in the last big boom. There was some land which leased for $13,000 per acre for minerals. You just never know how important your mineral acreage is worth in putting a unit together and you never know what procedure will enable your land to produce minerals in the future. Fracking techniques in the last boom proved that. Reserve all the minerals in all your conveyances and don't worry about whether you own any minerals or not. If you don't have any minerals, the landmen will find that out in the future. If you do have any mineral interests, they will be knocking on your door when the time comes...

There would never be a well on the property. What is happening around here is that they drill from a pad vertically down about 5000', and then start horizontal drilling for 1000's of feet in various directions. So, if a well was drilled, the owners of the lots above would have no idea it was going on, except they would see the drilling rig somewhere else. However, the chances of drilling happening nearby are slim, although I would not rule it out in the future, especially if the price of gas goes back up (which it will someday).

There doesn't have to be a well drilled on the property for you to make money. My dad lives in a subdivision South of Ft.Worth, Texas and when he bought his lot, the seller did not reserve the minerals. Fifteen years later, a landman came by to get him to sign a mineral lease because his lot was within a gas unit. They sank a directional well underneath his lot from 3/4 of a mile away and he was getting about $100 a month just from his small lot. This may or may not ever happen to you, just sayin'...