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If I Find Oil on My Land, Is It Mine?

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By Christopher Coble, Esq. on July 25, 2015 9:57 AM

Welcome to the new FindLaw series, "If I Find," where we'll discuss the rule of finders keepers as it applies to different topics. We hope you'll check back regularly!

What's that black sludge puddling up in your back yard? ... Oil?

Congratulations, you're rich! Or, are you? Finding oil on your property may feel like striking liquid gold and winning the jackpot. However, it may not be a sure fact that you'll make any money off of it. Be careful, because it may not even belongs to you.

If you find oil in your back yard, is it yours?

Mineral Rights

If you own land, you have property rights. This means you can harvest anything that grows from your land, or build whatever you want on your land.

To own oil or any other mineral coming from your land, you must have mineral rights in addition to your property rights. In other countries, the government has a sovereign claim over all mineral rights. In the United States, private individuals can own mineral rights, unless already reserved by the government.

In a simple world, owning land should mean you own everything below it, on it, and above it. However, our laws complicate the matter.

Do You Own the Mineral Rights to Your Land?

Again, owning property rights to land does not necessarily mean you own the mineral rights.

Property rights and mineral rights were originally tied to the land. The owner owned both. However, mineral rights and property rights can be severed, meaning the owner can sell one and keep the other. So, the original owner of your land may have sold the property rights to one person and kept the mineral rights or sold it to another person. By the time you bought the land, the mineral rights may have been sold already.

To find out if you do have mineral rights, check your deed of ownership. Another way to find who owns the mineral rights to your land is to do a title search at your county's records office.

You Have Mineral Rights. Now What?

So, a search of the records and an examination of the deed paid off. You own the mineral rights, which means you own the oil. Now what? Drilling for oil is expensive! Do you have the capital to get it done?

If you don't, you could sell or lease the mineral rights to someone who does have the money and equipment to do so, and let them do all the hard work.

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