[dalmations202]

Originally Posted by wmbwinn

In the situation above, do you get 50% of the royalties for the well placed on your property since you own 50% of the mineral rights? Or did the other person somehow manage to get all of it? What exactly is your legal position now?

Yes, we would, if there was a well on it. Unfortunately, we don't get the lease money -- at least not at the rate we sold the rest of it at. She leased it at $175 an acre for 5 years, we leased at $325 for a 3/2 split. Pay us for the first 3 then pay us again for a guarantee for the next 2. We are about a year from it ending, without a drill put on the place because the gas line didn't come through but got re-routed. We lost lots of money on her deal, that we didn't have a choice about, even though we own both the land and 50% of the mineral rights.

Anyway, I understand everything you said.

In the current system, those tiny fragmented mineral rights usually end up getting bought out by the oil/gas companies drilling them. Chesapeake sends me an offer to buy out the mineral rights every year. I will probably sell it to them at some point just to be done with it.

So, that could be even worse for a land owner. Now, it is Chesapeake (or a similar company) who actually owns the mineral right and is also drilling it (double profit). And, certainly, they are going to build wells and do whatever else fits their business model with no regard for your concerns.

But, if you did what you want to do, then people with tiny mineral rights would sell out to the oil/gas companies even faster. And, those with mineral rights that aren't worth anything would also potentially sell those mineral rights more readily also.

I don't know how that idea would actually result in the landowner getting the mineral right back. And, would the landowner even want that mineral right back if wasn't worth anything and would cause a higher tax to be placed?

I'm just not sure how the idea would help you.

Are you wanting the mineral right (and its tax you proposed) just to prevent the mineral right owner from signing leases for wells and similar construction? Is it worth that?

The landowner is already taxed. I agree with royalty taxes as well. I just don't agree with the splintered mineral rights that can be kept indefinitely when the landowner is paying the bill, but the mineral rights owner is the one that can hit the jackpot.