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Mineral Rights 101

Subsurface vs. Surface Leasing

A common misconception is that a mineral owner who also owns the surface must lease both surface and subsurface rights to the same operator. Operators lease your surface rights at a discount when they add it to your subsurface lease. Surface rights had little value until the last 10 years. With the boom in production from shale wells, there was an inherent need to build infrastructure—pipelines, compressor stations, etc.—which all need surface rights. Operators who had included surface rights with their subsurface leases sat on a goldmine that they monetized by selling the rights to pipeline companies to build out needed infrastructure. Mineral owners and surface owners were held to contracts that had little protection or compensation for the building of these pipelines. While oil & gas pipeline construction has slowed down, water infrastructure has supplemented as operators try to reduce costs of transporting disposed water. In locations such as West Texas, alternative energy has also led to a boom in surface rights and the selling of leases from operators to other firms.

Almost all mineral owners are also surface owners, even if it is not of the property their minerals sit on. If you are a homeowner, you own surface rights! We, at MineraliQ, suggest omitting your surface rights from your subsurface lease. There is no reason to lease your surface acreage without a separate agreement that ensures you are protected and compensated for any encumbrances on your property. Unlike an oil or gas well, surface operations are visible and can be detrimental to your property value. While a pipeline is buried, it must be disclosed; can you imagine trying to sell a house with a 15-inch pipeline running through the middle of it? Or trying to sell a farm with a large windmill and access roads in the middle?

Figure 1: Pipelines across Texas vs. oil & gas rig locations

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