How to find out who owns the mineral rights to your land

mineral glossaryIf you are a landowner in Carbon or Stillwater County, now is the time to determine whether or not you own the mineral rights under your land.

Unified vs. split estates
If you are lucky, your estate is unified, or fee simple: the mineral and surface rights are held together. More often, minerals have been severed from the land, either because the federal government reserved minerals in its initial homestead claims, or because the owner has sold off the mineral rights to a property.

A landowner can also hold a fractional ownership of the mineral rights. Fractionalization occurs when an owner sells a portion of the mineral rights, or leaves a portion to multiple heirs. Fractional mineral interests are usually referred to as tenants in common.

How do you find out who owns mineral rights to your property?
The following information has been obtained from various sources, including interviews with the Clerk and Recorder in both Stillwater and Carbon counties, and an independent landman. Your property is important to you, and I strongly suggest you determine for yourself the best way to find out the legal status of your estate.

clerk and recorder

  1. You need a legal description of your property. You can find this on your property tax bill. If you don’t have it, staff at both Stillwater and Carbon counties will help you find it.
  2. Go to the office of the county clerk and recorder. Addresses are shown at left. The records of land transactions are held in the “public room,” because the public is allowed to go in and look.
  3. Staff in both counties will “help you get started.” This means finding the right plat book and locating your property. Deed numbers will be listed.
  4. Once you have the deed numbers, you look up the individual deeds and determine whether mineral rights have ever been severed or withheld. If they have been severed, a separate mineral deed should be referenced.
  5. You will need to track down the transaction history. Each transaction will have its own deed, so you go back transaction by transaction, ideally until you get to the land patent.

Both counties said a search can take several hours, depending on how many times the rights have been sold and whether the mineral rights have been severed. Based on conversations with the clerk and recorder offices, Carbon County has much more computerized information than Stillwater County. When you go to the Courthouse, staff will show you how to access the digitized information.

If you don’t have the time to do this, you can hire a landman to do it for you. Many landmen work for oil and gas companies, but you can go to the site of the Montana Association of Professional Landmen, which maintains a directory of its members by affiliation, to find an independent to do this for you.

I spoke to a local independent landman based in Columbus, and he told me that his rates are $65/hour, $500/day. The actual cost of a search varies by size and complexity of the historical record.

He told me that searches in Stillwater County are more difficult than in Carbon County because less is online, and the records are organized in a “blind index,” which makes it more difficult to find an individual property. “You have to go through everything,” he told me. He said that he sometimes recommends use of an abstractor, who has the ability to research the history of a title back to the land patent. The reason, he told me, is that “Stillwater County was an ag county, and years ago nobody was thinking about mineral rights. So basically they just didn’t keep very good records.” The rate for an abstractor is about $100/hour.

Assessing the value of the oil under your land
The value of mineral rights is determined by assessment. Since future oil production is uncertain, estimates of value may vary with assessments of the amount of oil that can be produced. An income approach is commonly used to assess value. This means that the amount of recoverable oil is estimated and then multiplied by the expected market price of the product. The costs of production must be taken into account. A discount is applied for the time of production.

To determine what the value of minerals is, an assessment can be made. Licensed appraisers with experience in mineral assessment should be used. Alternatively, many mineral brokers are willing to quote prices for mineral rights. An owner could ask for a bid on minerals from one of these buyers. A search for mineral rights brokers will give you plenty of options.

If your mineral rights are severed, you may want to consider reuniting them to your land ownership. The cost of doing this varies with the expected value of the oil underneath. As the landman I spoke to told me, if this is something you are considering, the time to look at it is now, because no oil has been found in the area and the assessed value will be less. If the Belfry exploratory well is successful, the assessed valuation will likely increase significantly.

An opportunity for community action
The more we understand and share publicly available information, the more we can coordinate our efforts to deal with potential drilling. If we can map existing leases and mineral rights, we can understand where drilling is likely to take place and who will be doing it. A lease map is being developed. You may be asked to share your information about who owns your mineral rights.

Be on the lookout for more information and a request to share your information.

*********

Special thanks to Montana State University Extension for their excellent resources on this topic.

Coming Soon: Dos and don’ts if you are a mineral rights owner; dos and don’ts if you are the surface owner of a split estate.

(Note: you can subscribe to the blog by entering your email address in the box on the upper right of this page and clicking “follow.” You’ll get an email update every time I do a post.)

One more thing: The Stillwater County Clerk and Recorder has posted a “Deed Scam Notice” on their web site. Be aware.

About davidjkatz

The Moses family has lived on the Stillwater River since 1974, when George and Lucile Moses retired and moved to the Beehive from the Twin Cities. They’re gone now, but their four daughters (pictured at left, on the Beehive) and their families continue to spend time there, and have grown to love the area. This blog started as an email chain to keep the family informed about the threat of increased fracking activity in the area, but the desire to inform and get involved led to the creation of this blog.
This entry was posted in Community Organization, Politics and History and tagged , , , , , , , . Bookmark the permalink.

17 Responses to How to find out who owns the mineral rights to your land

  1. Pingback: Announcing the first Rex Tillerson Fracking Hypocrite Award | Preserve the Beartooth Front

  2. Pingback: How drilling tramples on property rights and lowers home values | Preserve the Beartooth Front

  3. Pingback: A personal story: Terry and Teresa Jackson, West Virginia | Preserve the Beartooth Front

  4. Pingback: A visit to the front in the war against rural America | Preserve the Beartooth Front

  5. Pingback: A personal story: Carol French, Bradford County, Pennsylvania (with video) | Preserve the Beartooth Front

  6. Pingback: A personal story: Peter von Tiesenhausen, Demmitt, Alberta | Preserve the Beartooth Front

  7. Pingback: Citizen initiated zoning: a way to restore fairness to oil and gas drilling in Montana | Preserve the Beartooth Front

  8. Pingback: Repost: A visit to the front in the war against rural America | Preserve the Beartooth Front

  9. Pingback: Meeting today in Red Lodge! Frequently Asked Questions about the Silvertip citizen-initiated zone | Preserve the Beartooth Front

  10. Pingback: Energy Corporation of America is being sued for underpaying royalties to hundreds, possibly thousands, of land owners | Preserve the Beartooth Front

  11. Pingback: Billings Gazette Guest Opinion: Dennis Hoyem | Preserve the Beartooth Front

  12. Pingback: Oil and gas: 10 lessons for 2015 | Preserve the Beartooth Front

  13. Pingback: Civics lesson: how oil companies control the Montana legislature and deprive citizens of their rights | Preserve the Beartooth Front

  14. Pingback: Milestone: Preserve the Beartooth Front passes 100,000 hits | Preserve the Beartooth Front

  15. Pingback: Oil and gas: 10 lessons for 2015, for Montana, ND, OK, TX, OH, PA & WV

  16. Pingback: Action Alert: Your voice is needed to put strong Montana setback rules into place | Preserve the Beartooth Front

  17. Pingback: All briefs filed in Silvertip Zone case; Montana Supreme Court ruling is next | Preserve the Beartooth Front

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s