Texas mineral rights have a long history dating back to Spanish and Mexican rule when surface minerals were governed separately from land titles. Ownership of mineral rights allows owners to either extract minerals themselves or lease the rights to oil and gas companies in exchange for royalties. The Eagle Ford Shale formation is a major source of oil and gas in Texas and its recent development has created economic opportunities for both mineral rights owners and energy companies.

1.
Texas mineral rights have
a long history, with its
beginnings in the private
land titles in Texas
emanates from Spain and,
successively, Mexico, the
Republic of Texas, and the
State of Texas. Under the
jurisdiction of Spain and
Mexico, metals and
minerals taken from the
surface were governed
under separate laws. And,
in the Constitution of
1866, the state released to the landowners the option of acquiring the metals and
minerals therein. Since this time, Texas adopted the practice of mineral rights
ownership, but it was not until the Relinquishment Act of 1919 that allowed the
distinction between surface and mineral owners. The oil boon started with the first
oil well, Spindletop, in Beaumont in 1901. Two‐thirds of the counties in Texas
produce oil or natural gas for mineral rights owners. Mineral rights in Texas may be
produced by the owner or leased to an oil and gas company for production. The
major oil and gas fields in Texas include but are not limited to Eagle Ford Shale and
Granite Wash.
Minerals rights concern the ownership of minerals below the surface. Owners of
such rights have the option of acquiring the minerals themselves or to delegate this
action to a third party (i.e. an oil or gas company) by signing a lease agreement. In
Texas, the owners of these rights then receive a royalty from the oil and/or gas
produced on the land. Surface rights, those that deal with the ownership of physical
property of above ground, are separate from these mineral rights.
Eagle Ford Shale, for instance, is a hotbed of mineral deposits in Texas. This shale is
the primary source for the oil and gas areas in South Texas, such as the Austin Chalk
formation, and extends as far as the oil fields of East Arizona. Not until recently has
the Eagle Ford Shale been thought to be economically viable. Due to new
technological advances, such as hydraulic fracturing, drilling of the Eagle Ford Shale
is now possible; however, because of the shale’s high concentration of carbonate,
drilling in the Eagle Ford Shale does not mean its resources would deplete to
nothing. The shale’s natural permeability produces impressive amounts of oil and
natural gas. This makes the Eagle Ford Shale highly desirable for economic
opportunities for the oil and gas industry, as well as for those who own mineral
rights.

2. Owners of mineral rights also have the
opportunity to sell oil and natural gas
royalties. The process of selling both rights is a
similar one. The big difference between the
two is that a royalty from an oil or natural gas
company can be sold without the sale of
mineral rights. This all depends, however, on
the lease negotiated between the owner of the
mineral rights and oil and natural gas
company. When the oil and gas company
finishes or halts production on the surface, the
mineral rights owner can sign a new lease, if
the Held by Production (HBP) timeline ends.
HBP means that an oil and natural gas
company has drilled a well capable of viable
commercial production and the lease in
question is held past its primary term based on
said production. Eventually, a royalty payment
is made to the mineral rights owner. In Texas,
royalties can be negotiable and depend on a
number of factors, including the type of mineral and deposit.