Approximate Breakdown of Land Ownership in the US:
Private ownership- 1.334 billion (58%)
Federal Government- 713 million (31%)
States- 207 million (9%)
Tribal Lands- 46 million (2%)
The surface and underlying minerals were originally “bundled” together. In other words, the surface and minerals were owned by the same individual, government, etc. There are two ways to sever the surface from the minerals….you can sell the surface and retain the minerals or sell the minerals and retain the surface. So how can you determine if you own minerals? First, understand that the surface and the underlying minerals are also called 'Real Property'. Every document or contract entered into that involves the purchase or sale of real property must be filed in the county courthouse of the county where the property is located. So, pretty much any option you select to determine if you own minerals will include a search of the courthouse records. Let’s look at what your options are as a possible mineral owner.
Go to the Courthouse to Search Mineral Ownership Records
If you live on or near your property, you can go to the courthouse yourself to search the records. Make sure that you have your property's legal description when doing so! If you don’t have the description, go to the tax office first. As a surface owner, you are paying property taxes, so they can assist you with finding your property description. It’s best if you have the deed that was signed when you or a relative purchased the property. With the deed, you can ask for assistance in the deed records room where they will assist you in understanding the process of running title on your property. What you are looking for in the courthouse is a deed covering your property where the seller (called “Grantor”) conveyed the property to a buyer (called “Grantee”). You need to understand that, depending on what state the property is located in, the first deeds could have been executed in the 1800s. However, you must start with the most current deed and research the title in reverse order. For example: If your property was acquired from the Allen family, were the minerals reserved in that deed? Then find the deed where the Allen family was the Grantee. You might find that the Allen family purchased the property from the Beck family. Read that deed. Then find the deed where the Beck family purchased the property from the Clark family. It will take some time, but it will be necessary to locate and understand all the deeds. If you find a deed where all oil, gas, and other minerals are reserved, then you will know that the surface and minerals have been severed and all subsequent conveyances of the surface will not include the minerals. Many of these deeds will state that the Grantor is conveying all rights, titles, and interests. But understand that if the grantor does not own the minerals, then the Grantor is conveying the surface only. Some counties in some states have online records. It can be difficult to run a title using only online records, but it is possible. To see if it's worth looking into, we suggest you use LandGate's free online tool to understand the potential worth of developing your minerals. You can understand its worth by finding your parcel on LandGate's map!
Hire a Landman to Run Your Title
There are many men and women in the land profession (“landmen”) who are quite capable of running titles to answer your questions. These landmen have spent many years researching county records to determine who owns minerals. These landmen could charge you anywhere from $300 - $500/day, depending on their education, experience level, certifications, and other important factors.
Hire a Title Company to Research Mineral Ownership
There are title companies in almost every town. However, most title companies support the real estate industry. The majority of real estate transactions are focused on the surface. Title on surface ownership is not as complicated as title on mineral ownership. If you can find a local title company that has the time and experience for a mineral ownership search, that could be a good option.
Hire an Attorney to Help Determine if you Own Your Minerals
Hiring an attorney would likely be the most expensive option. However, hiring an attorney could be your best option. In many cases, property deeds are complicated to read and interpret, especially when property rights are being transferred with minerals being reserved. Having an attorney involved in the title research can help when complications arise. If there are title issues, you will need an attorney to prepare documents to clear your title. As an example:
Imagine Mr. Allen selling the property in 1905 to Mr. Beck and retaining all the oil and gas rights. Then Mr. Allen died without a will in 1915, being survived by his wife and 4 children. In most states, 50% of Mr. Allen’s assets would pass to his wife with the remaining 50% being divided between his 4 children. This would result in the minerals being owned 50% by his wife and 12.5% by each child.
Now let’s assume that each of the 4 children died in 1965. Each of the 4 children were married with 4 children. In this example, there are now 16 grandchildren of Mr. Allen who died in 1915. Each of these grandchildren owns a portion of the minerals. How about the 50% that passed to Mr. Allen’s wife in 1915? And if each of her 4 children were married when they each passed in 1965, who now owns the 50% that passed to their spouses? Answer – It gets complicated and someone’s going to need an attorney.
The Best Way to Determine if You Own Mineral Rights
You must find out if you own minerals. Most people who own property in the U.S. think they own the minerals. And most people who own minerals in the U.S. don’t know they own them. A great starting point would be to look up your property on LandGate's map to find out how much they are worth. In addition, please refer to the guidelines stated above as well as the other free resources we have on mineral ownership.
Many of the landowners using LandGate to list their properties for lease or for sale are farmers and ranchers. Their property has been in their families for generations and holds a lot of sentimental value, so those who want to sell their minerals have good reason to retain surface ownership. Let us talk about the concerns property owners should be made aware of when selling their minerals but retaining the surface rights.
Will I receive more money for my minerals if I sell vs lease?
At closing, yes, you will receive more money by selling your minerals vs leasing your minerals. Based on what landowners have experienced in the Northern DJ Basin, mineral buyers are willing to pay a minimum of 3 times the amount of money to buy minerals vs. what you might receive as a lease bonus if you lease your minerals.
Not all mineral owners are in the same financial position. Receiving a big check at closing is attractive. When comparing selling vs. lease property rights, a lot of things have to happen to make leasing more valuable. For example, in a lease, you will retain a royalty. This royalty could be extremely valuable IF the operator decides to drill a well, and IF the well produces oil & gas, which MIGHT result in more wells being drilled on your minerals. So, instead of 'hoping for the best' given all of the uncertainties associated with leasing your minerals, you may elect to sell.
I am selling my minerals and keeping my surface. What could go wrong?
If you sell 100% of the mineral rights under your surface, you must be aware of the potential pitfalls. Similarly, there are many differences between surface and mineral rights. The mineral estate is the dominant estate, meaning the owner of the mineral rights has just as much right to access and benefit from their minerals as the surface owner has rights to access and use the surface. The problem is that the mineral owner has the right to drill and develop their mineral rights or lease their mineral rights to a company to drill and develop.
Drilling for oil requires usage of the surface for the placement of machinery and for accessing that machinery. Throughout history, there have been many surface owners who have answered a knock at the door, only to learn that an oil company has leased the minerals under their property and wants to begin drilling operations. Drilling operations could include cutting down trees, building roads across your property, digging pits, and building a drill site pad that could cover several acres. What will happen to your crops and how will your cattle be protected from 18-wheelers and construction traffic on your property? Will the roads and pits be there forever?
Most oil companies have staff that will meet with the surface owner to lay out a plan before operations begin. In many cases, the companies will build roads at locations where the surface owner might want to keep them. The oil company will pay for lost crops, build fences to keep livestock safe, and do its best to restore the surface to its original condition when its operations are complete. It is especially important to understand that the beautiful ranch land you purchased to run cattle and raise your family could eventually look like an oilfield. This can be avoided!
A Success Story of Landowners Who Utilized LandGate
In southeastern Wyoming, a ranching family with over 5,000 acres turned to LandGate's platform to transform their land management approach and secure financial stability. Historically, the family faced difficulties maintaining their ranching legacy, relying on off-ranch jobs, and leasing mineral rights without significant returns. Previously burned by a bad solar deal, they were skeptical of energy developers but found renewed opportunity through LandGate’s free valuation tools and marketplace.
The family capitalized on solar energy leases by identifying the potential of high-voltage transmission lines on their property. This strategic move allowed them to lease 1,200 acres initially, with further offers following, leading to three renewable energy agreements. Over two years, these leases alleviated financial pressures, paving the way for debt reduction and potential land improvements.
The family plans to utilize revenue from these projects, alongside traditional ranching operations, to expand their ranch through the 1031 exchange. They have listed their land for carbon credits, further diversifying their income streams. LandGate’s platform proved instrumental in helping the family realize the untapped value of their land, ensuring long-term sustainability and growth.
Landowners: LandGate provides free data for landowners to help them make better decisions about their land by determining its value regarding solar farm potential, wind farm potential, minerals, carbon credits, or any other resource. Find your land values now!
Land Real Estate Agents: Subscribe to our data and get access to the only data intelligence for land resources. Bring this unique knowledge to your clients to help them benefit from any additional revenue streams—access to $4 trillion a year of energy and environmental deals. LandGate’s marketplace gives access to the largest network of corporate buyers paying top dollar for land and its resources.
