Wednesday, April 24, 2013

The Dominant/Servient Estate Theory, Part 1

This is the first subsection to the Rights of Surface and Subsurface use section of Chapter 2 in Texas Law of Oil and Gas, Section 2. 

When we look at the mineral fee ownership and the different rights, one of the rights we briefly mentioned in our last post was the implied right to use the surface in ways necessary to carry out oil and gas production operations.  As an aside, I have seen numerous deeds where there has been a severance of the mineral estate but the mineral owner has waived their right to enter on the land - keep an eye out for this on your conveyances.  It should be elementary to conclude that entering on the surface in order to carry out exploration, drilling, producing, transporting and marketing operations could in many circumstances result in interfering with the right of the surface owner to use the surface.  How to deal with that - first we have to determine which estate is dominant.  In Texas, we have case law that has established the mineral fee as the dominant estate, and the text cites numerous cases on point (I will limit my reference herein to Vest v. Exxon Corp., 752 F.2d 959 [5th Cir. 1985]).  This means that the mineral fee owner can actually enjoin actions by the surface owner or lessee that interfered with reasonable use, operation and development of the mineral estate (again, more case references here - see the text for the particular cases).  The text also discusses the historical chain of the doctrine that established the mineral estate as dominant back to the Kingdom of Spain, where Spanish law held all minerals were owned by the sovereign, and he necessarily had the right to use the surface of privately owned land for mining purposes.

The implied right to use the surface includes several activities that are often exercised by a company that has executed an oil and gas lease with the mineral owner.  This includes conducting seismic tests (I can't remember but I think I saw an episode of Psych where the guys came across seismic testing equipment - maybe it was Monk?), building storage tanks, building roads (to get to the drillsite), and using the landowner's water for drilling and secondary recovery operations (secondary recovery includes adding pressure to the minerals subsurface to push more of them to the wellbore for production). 

We will cover more of this subject on another post.

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