Residents in oil patches need to take the initiative in protecting their minerals rights, a government policy analyst told the audience at an energy symposium at Southwest Mississippi Community College last week.
Lydia Quarles, a senior policy analyst at the John C. Stennis Institute of Government at Mississippi State University, discussed property rights, mineral rights, zoning issues and legal dilemmas some residents might encounter.
Quarles noted Thursday that in Mississippi, ownership of mineral rights can be severed from the land, meaning home and landowners may have rights to the surface and air above it, but not what goes on underground.
“Mineral rights are a property right, assuming mineral rights have not been severed,” she said. “Simply ownership means you control the surface and the air along the surface. Citizens need to get mineral titles. Mineral titles are necessary to determine who is owner of underlying mineral rights and is the only document that can substantiate legal ownership.”
Quarles said property owners should not solely rely on what oil company land men who are trying to lease mineral rights tell them about their property.
“The landowner should not rely on what the land men have to say,” she said. “You need to get your own mineral opinion. If a company is interested in your mineral rights, and they want to lease from you, they are going to start looking into ownership rights.”
Quarles said oil companies will look for issues such as contested wills, administration of estates without wills that went uncontested, divorce decrees, questionable deeds and errors in language of those deeds in order to get an edge in their acquisition of mineral rights. This is called curative work, she said.
With that in mind, Quarles suggested landowners acquire title insurance.
After drilling has started, Quarles said landowners can’t let their guard down.
“If drilling has begun, citizens need to make sure the language in the lease protects your property while drilling is going on,” Quarles said. “You must make sure that language in the deed protects your crops, water and your enjoyment of the quiet and peaceful atmosphere during operation.
“This is the time most of the disagreements arise at the time of extraction between the companies and landowners. The companies may want to use more of the land than was anticipated.”
Quarles said if oil is discovered, the volume of leaving the well is measured before leaving the work site.
“Oil and gas and minerals are commodities,” she said. “The value of minerals is like politics — it’s local.”
Quarles said any provision of a lease is negotiable. She said there are a number of issues landowners must know about their lease, including:
• Whether its is for oil or gas production.
• What lands are being leased.
• How much the royalty interest is, and if it is for more than type of one mineral.
• How royalties are calculated.
• What records will be available to the lessor.
• Whether the lease allow seismic operations.
• What happens in the event of a dry hole.
Landowners also need to strive for a primary time — or drilling time — that is as short as possible, Quarles said. “That needs to be stipulated in the lease.”
She said landowners should ask for a lease provision that makes the oil company responsible for attorney’s fees in the event of legal problems.
Quarles said landowners should have representation when it comes to mineral rights and leasing.
“I highly recommend individuals to do nothing without consulting independent counsel,” she said. “Get somebody who knows a little about these documents.”
Turning to communities at large, Quarles said they can protect themselves from unwanted activity that can often come with oil exploration through zoning laws, which can lessen street and road congestion, strip bars, liquor stores and check-cashing operations.
