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01
What "title" means
"Title" means ownership, and the records that show it.
In oil and gas, examining title means tracing ownership of the minerals under a tract through recorded documents (deeds, leases, wills, court orders) until you can say who owns the minerals today and point to the instruments that show it. Most of that trail is in the county records. Some of it is not: an owner who died without a probate, for example, leaves heirs the county records may never name.
This topic covers what can be owned in a tract.
02
Fee simple
Fee simple absolute is the largest ownership the law recognizes. A fee simple owner of a tract that has never been severed owns the surface and the minerals beneath it.
The usual way to picture ownership is a bundle of sticks. Each stick is a separate right: to possess the land, use it, sell it, lease it, give it away, or keep other people off it.
The sticks can be separated. You can sell some and keep others. In mineral title, the separation that matters most is between the surface and the minerals.
03
The two estates
A tract can be divided into two estates:
- The surface estate: the land you stand on, with its soil, buildings, crops, and roads.
- The mineral estate: the oil, gas, and other minerals below, plus the rights needed to get them out.
When one person owns the tract in fee simple, they own both estates, and a deed of the land conveys both. The two estates can be separated.
The ownership of the oil, gas, and other minerals under a tract, together with the rights necessary to explore for, develop, and produce them. It is a real property interest: you can own it, sell it, lease it, and pass it on, separately from the surface.
04
The mineral estate's five sticks
The mineral estate has its own bundle of rights. One common way to describe it is as five separate rights:
Each of the five can be severed and owned separately. Someone who owns only a share of stick 5, royalty with no right to lease and no bonus, owns a non-participating royalty interest (NPRI). When the right to lease (stick 2) is split off, that is a severed executive right. Many title disputes turn on which of these rights a deed conveyed.
Royalty doesn't pay the costs of drilling or producing the well. Whether it shares costs after production (gathering, processing, transport) depends on the lease and state law.
The Fraction of what? lesson works through the difference between a share of the minerals and a share of the royalty, with numbers.
State law varies. States divide the mineral estate's rights in different ways. In every state the mineral estate can be divided, and often is.
05
Severance: splitting the estate
Severance is when the surface and the minerals stop having the same owner. From then on there are two estates with two chains of title, and each can be sold, leased, or inherited on its own. Severance usually happens by deed, in one of three ways:
- By reservation: a deed conveys the land, but the grantor reserves (keeps) the minerals. The buyer gets the surface and the seller keeps the minerals.
- By exception: a deed conveys the land but leaves the minerals out of the grant. If the grantor owned them, the grantor keeps them.
- By grant: a deed conveys only the minerals (a "mineral deed"), leaving the surface with the grantor.
Severance can also start at the patent. In the West, the United States reserved the minerals in many homestead patents, so the surface went to the homesteader and the minerals stayed with the government.
severs
The separation of the mineral estate from the surface estate, so the two are owned by different people. Once severed, the mineral chain of title can look nothing like the surface chain, which is why examiners trace them separately.
After severance the mineral chain and the surface chain are separate. The surface might change hands five times while the minerals stay in one family, or the reverse. Keeping the two chains straight is a large part of an examiner's job.
06
The dominant estate
Once the surface and the minerals have different owners, their uses can collide. The mineral owner wants to drill where the surface owner runs cattle.
By default, the mineral estate is the dominant estate, and the surface estate is servient. The mineral owner has an implied right to use as much of the surface as is reasonably necessary to explore for and produce the minerals (roads, well pads, pipelines). Whether the surface owner must be paid for that use or for damages depends on state law, and most modern operations run under a surface use agreement.
The dominant estate has limits. Many states apply an accommodation doctrine: if the mineral owner's planned use would interfere with an existing surface use, and a reasonable alternative would still let the minerals be produced, the mineral owner may have to use the alternative.
State law varies. States apply the dominant-estate rule and the accommodation doctrine differently, and many add surface-use statutes on top. When it matters, check the law of your state.
07
Why it matters in title work
When you examine title, you are almost always following the mineral estate. For every tract, ask:
- Was the mineral estate ever severed from the surface? If so, when, and by what instrument?
- Were any individual sticks carved out, such as a non-participating royalty or a severed executive right?
- Who has the power to sign a lease, and who is entitled to get paid?
To practice tracing ownership through a series of deeds, try the chain of title lesson.
08
Review questions
Check yourself. Tap a question to see the answer.