Ownership of Mineral Rights under Texas Law RICHARD L. MERRILL FABIO & MERRILL TWELVE GREENWAY PLAZA, SUITE 101 HOUSTON, TEXAS 77046-1208 713-961-0408 713-961-2934 (FAX)
[email protected] www.fabioandmerrill.com www.fabiomerrill.com I. CHARACTERIZATION OF MINERAL RIGHTS UNDER TEXAS LAW In order to understand title to oil, gas and other minerals, it is important to know what is considered a mineral under Texas law and what materials and elements which from a Webster’s dictionary definition would be considered as minerals actually are considered part of the surface estate. A. Oil, Gas and Constituent Elements There are a number of statutory and regulatory definitions of oil and gas which are similar but not identical. Texas Natural Resources Code Sections 85.001, 86.002, 91.001 define the terms “oil” and “gas” as well as some of the constituent elements produced in conjunction with oil and gas. Oil and gas also have other statutory definitions than those listed below, but the other definitions are generally broader because they are used in the context of pollution, health and safety, and environmental matters, underground storage of gas, taxation, and compression and liquification of natural gas. For example, in the context of pollution statutes, it matters little whether the oil is crude or refined so the definition for oil is broadened. 1. Oil "Oil" means crude oil and crude petroleum oil (Sec. 91.001); "Oil" means crude petroleum oil (Sec. 86.002); "Oil" means crude petroleum oil, crude petroleum, and crude oil (Sec. 85.001) The word "petroleum" comes from a Greek word that literally means "rock oil" or "oil from the earth." and the usual dictionary definition of the word “crude” as it applies to oil or other natural substances is “existing in a natural state and not altered by cooking or processing.” This definition is embodied in 34 TAC Sec.