Texas Mineral Rights: The Complete Guide for Landowners

In Texas, mineral rights can be worth more than the surface—or they can be worthless. Understanding mineral rights is essential for anyone buying, selling, or owning Texas land. Here's what you need to know.

What Are Mineral Rights?

Mineral rights give the owner the right to extract subsurface resources:

• Oil and natural gas
• Coal
• Metals
• Sometimes: sand, gravel, and groundwater (varies by deed language)

In Texas, these rights can be separated ("severed") from surface rights, meaning you can own the land but someone else owns what's beneath it.

The Critical Question: Who Owns the Minerals?

How to Find Out

Review the deed: Look for mineral reservations

Check abstract history: Title company can research

County records: Filed deeds show ownership transfers

Texas Railroad Commission: Shows current leases and production

What You'll Typically Find

• 100% minerals convey: Best case—you get everything
• Partial minerals convey: Common—50%, 25%, or other fractions
• No minerals convey: Previous owner reserved them
• Complex fractions: Multiple prior owners each reserved portions

Why Mineral Ownership Matters

If Minerals Are Severed

Someone else (the mineral owner) has the legal right to:

• Access your property for exploration
• Drill wells
• Build roads and pipelines
• Use surface water for operations

You cannot prevent this, though you're entitled to surface damages.

If You Own the Minerals

You can:

• Lease to oil/gas companies for royalties
• Sell minerals separately from surface
• Refuse to lease (your choice)
• Benefit from any production

Current Mineral Lease Terms in Texas

Typical Lease Components

Bonus Payment: Upfront payment to sign lease

• Active areas: $100 - $1,000+ per acre
• Speculative areas: $25 - $100 per acre
• Coleman County typically: $50 - $200 per acre (varies by activity)

Royalty Rate: Percentage of production value

• Minimum: 1/8 (12.5%)
• Common: 3/16 (18.75%) to 1/4 (25%)
• Negotiable based on competition for leases

Primary Term: How long company has to drill

• Typically 3-5 years
• Lease expires if no production by end of term

Buying Property: Mineral Considerations

Always Verify Before Closing

Don't assume minerals convey. Verify:

• What percentage of minerals you're actually buying
• Whether there are existing leases
• If there's current production
• What lease terms exist

How Minerals Affect Property Value

• Minerals included: Can add significant value in active areas
• Minerals severed: Property may be discounted
• Active production: Existing royalty income is valuable
• Lease potential: Bonus payments provide upfront income

Red Flags

• Seller doesn't know mineral status (common but problematic)
• Multiple complex reservations in deed history
• Active drilling nearby with unclear lease status on property
• Existing lease with unfavorable terms

Selling Property: Mineral Decisions

Option 1: Sell Surface and Minerals Together

• Simplifies transaction
• May command premium from buyers wanting full ownership
• Appropriate if mineral value is low/speculative

Option 2: Reserve Minerals When Selling Surface

• Keep potential future income
• May reduce surface sale price
• Common if you believe area has development potential

Option 3: Sell Minerals Separately

• Realize mineral value immediately
• Keep surface ownership
• Requires finding mineral buyer

Living with Severed Minerals

If you buy property where minerals are severed:

Your Rights

• Receive advance notice of drilling operations
• Compensation for surface damages
• Restrict operations to reasonable areas
• Negotiate surface use agreements

Your Limitations

• Cannot prevent mineral extraction
• Cannot stop legal access
• Must allow reasonable use of surface for operations

Best Practices

• Know who owns the minerals (maintain contact info)
• Document property condition
• Negotiate surface use agreements before drilling begins
• Consider surface damage liability in property insurance

Mineral Rights Valuation

Mineral values depend on:

Production Status

• Producing wells: Value based on current income
• Proven reserves: Geologically confirmed resources
• Unproven potential: Speculative value based on nearby activity

Location Factors

• Proximity to existing production
• Basin (Permian Basin minerals worth more than East Texas)
• Depth of formation (affects drilling economics)

Ownership Percentage

• 100% of minerals vs fractional interest
• Existing lease terms
• Depth restrictions

Questions to Ask When Buying

What percentage of minerals convey with this sale?

Is there an existing mineral lease? What are the terms?

Is there any current production?

Who owns the severed minerals?

Is there any drilling activity nearby?

What's the lease history on this property?

My Approach to Mineral Due Diligence

When representing buyers, I always:

• Review deed language for mineral reservations
• Request title commitment early
• Research nearby drilling activity
• Discuss mineral implications honestly
• Recommend professional title review for complex situations

Minerals can complicate transactions but understanding them protects both buyers and sellers.

Questions About Minerals on a Specific Property?

I help buyers understand mineral situations and sellers present their properties accurately. Call (325) 465-1342 to discuss any property.