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If you are looking into buying or selling oil and gas royalties, it is very important to know the difference between surface rights vs. mineral rights. Land in the United States is very unique, as the US and Canada are the only countries in the world in which the government does not automatically own the minerals or resources located beneath the surface of an individual’s property. Whenever land is bought in the United States, the new owner will typically acquire both the surface rights and the mineral (subsurface) rights of the property, unless the two have already been separated and noted in the property title.
What are Surface Rights?
Surface rights can be defined as the ownership rights of a parcel of real estate that is limited to the Earth’s surface. This does not include the air above the surface or the land within the subsurface. Surface rights entitle the landowner to all superficies, which is a Latin legal term referring to anything placed upon and attached to the ground, such as existing buildings.
What are Mineral/Subsurface Rights?
Mineral rights are the property owners’ rights to the minerals found in the soil below the Earth’s surface (in the subsurface). Mineral rights and surface rights can be owned by two different parties, if the mineral rights have been sold to another person or entity.
The Intersection of Surface Rights and Mineral Rights
Obviously, in order to extract the minerals from the earth, the surface will need to be punctured. If the owner of both the surface rights and the mineral/subsurface rights is the same person or entity, then no negotiations are necessary for the placement of drills, oil wells, pipelines, and other extraction materials. If the owners of the mineral rights are different than the owners of the surface rights, then things get a bit more complicated.
Negotiation Between Surface Rights vs. Mineral Rights Owners
The laws governing mineral rights owners ability to override and extract the minerals from below the surface of a parcel of land by any means necessary varies from state to state. In some cases, surface rights may be overruled entirely in order for the extraction to take place. In other cases, the surface rights owners may have the power to approve the drilling location or may be entitled to compensation for surface damage that affects the landowner’s livelihood.
