Every state sets the mineral right within the state, and this is no different in Pennsylvania. Just like in other states, there are some unique issues to the law that makes working with a firm handling mineral, oil and gas rights sales a must.
When it comes to Pennsylvania mineral rights, there are some very interesting considerations that landowners should be aware of. A top company providing assistance in the sale of the mineral rights should make every effort to inform you of how these laws can impact the value of your mineral rights and what you can expect to be offered from the oil and gas companies that are interested.
The Dunham Rule
One of the interesting components in the sale of mineral rights in Pennsylvania is known as the Dunham Rule. This rule stipulates that oil and gas rights are not included as general mineral rights on a property sale and have to be specifically identified.
The Dunham Rule has been recently reaffirmed by the Pennsylvania Supreme Court in the case Butler v Charles Power Estate in 2011. This rule, which clearly states that unless in the conveyance of land there is an exception or a reservation of minerals that specifically uses the terms natural gas and oil, the presumption is that it was not considered or included in the conveyance.
The original case, which was Dunham and Shortt v Kirkpatrick in 1882, included the court ruling the petroleum rights were not included in the reservation of “all minerals”, and this has been carried forward to include oil and gas.
Dormant Mineral Rights
In some cases, the mineral rights to property are severed from the surface rights, or they are excepted or reserved. When these mineral rights sit dormant and do not transfer, get passed on, or are not used, they can be classified as dormant.
When an oil company comes into buy Pennsylvania mineral rights, and they are found to be dormant, there is a lengthy process of trying to track down the heirs of the last owners of the rights. This can result in a considerable delay in tracking down the heirs, which may be in different countries and certainly in different states.
When selling Pennsylvania mineral rights, it is critical to have all the relevant information about the title of the property and the complicated ownership issues that can go along with the mineral rights in this state.