Monday, January 14, 2013

Mineral Ownership Principals

This post is probably going to be boring for anyone reading it, because I'm basically re-stating the Texas Law of Oil and Gas, Second Edition, by Ernest E. Smitha nd Jacqueline Lang Weaver (I'm reviewing my work right now, and hope that this will help the study sink in that much deeper).  Nothing I am writing is new, and while I am trying to re-state it, the ideas come from their research and writing.  If I'm misstating what they've said, then I welcome corrections, however, I will not be posting any other citations for their work beyond this paragraph. 

In Oil and Gas law, particularly here in Texas (which I single out due to the fact that my study materials are for Texas Oil and Gas Law), perhaps the first issue one encounters when dealing with Oil and Gas after locating it is the question, "Who owns it?"  over the years, the concept that has controlled has been the Rule of Capture. 

As the authors note, "the probable reason for the urle of capture was not so much the legal analogies but practical necessity."  The concept apparently was adopted earliest in Appalachia and here in Texas beginning in 1910. 

The basic notion of the Rule of Capture is, essentially, that a person owns all of the oil and gas produced by a well on his land, even if the well is draining oil and gas from underneath other properties.  Note that this applies to wells that are bottomed on their land, not a well that has begun on their property and angled into another person's property - that would be a trespass.

There are remedies for the owner whose minerals are being drained, such as an offset wel.  The landowners, in Texas, has this ability, as recognized by the Texas Supreme Court. 

There is a lot to go through in this book, and I'm going to be doing it relatively piecemeal, so bear with me.

Again, this is the "lite" version of the material - please read Texas Law of Oil and Gas, Second Edition for a thorough working of the law.


Bruce said...

So if my neighbor is slurping up my oil, they have to give me a little something in return?

Steve said...

If you can prove it.

Welcome back!