what qualifies as a mineral

In this illustration a well has been drilled vertically but deviated to horizontal below the surface. This type of drilling can extend the reach of a well for a mile or more in any direction. It is therefore possible to drill a well on one property and drain oil or gas from adjacent lands. How the gas and royalties will be shared is sometimes determined by state regulations and sometimes by private agreements. Regulations governing the sharing of oil and gas production vary from one state to another (and for different drilling situations within a single state). It is critical to either know the regulations or get reliable advice before entering into any oil and gas transaction.

State and Local Laws Always Apply

Most states have laws that regulate mining and drilling activity. There are also laws that regulate the sale of surface and mineral property. These laws are meant to protect the environment and all parties involved in property transactions. These laws are the only protection available to buyers or sellers on issues that are not specifically addressed in the mineral transaction agreement.

Although mineral rights laws are similar from state to state, small variations can make an enormous difference when applied to individual transactions. In addition, mining and oil and gas regulations can vary significantly from one state to another. These can also have an enormous difference when applied to individual transactions. Each transaction is unique and should be carefully considered before any permanent agreement is made.

What Qualifies as a "Mineral"?

The word "mineral" is used in a variety of contexts. Generally, ores of metals, coal, oil, natural gas, gemstones, dimension stone, construction aggregate, salt and other materials extracted from the ground are considered to be minerals. However, there is no definition of "mineral" that applies in every situation and what is considered to be a "mineral" can vary from state to state.