When do mineral rights revert to the landowner?
According to the Michigan Dormant Minerals Act, severed oil and gas mineral rights can revert to the surface owner.
June 19, 2013 - Author: Curtis Talley Jr., Michigan State University Extension
An owner who holds both the surface and mineral estate can elect to retain the oil and gas rights and sell the surface only. This creates a severed interest, with an owner of the surface and a separate owner of the oil and gas rights.
Under Michigan’s Dormant Minerals Act, which applies to only oil and gas rights, severed rights are considered abandoned and revert to the surface owner after 20 years, unless one of the following actions have occurred within a 20-year period:
- The severed interest is sold, leased, mortgaged, or transferred by recorded instrument.
- A drilling permit is issued.
- Oil or gas is actually produced or withdrawn from the severed holdings.
- The interest is utilized for underground gas storage operations.
- A record claim of interest is filed with the county Register of Deeds (Affidavit to Retain).
Based on the above, does the current surface owner have to be the owner for a continuous 20 years? For example, if there have been a couple of sales involving the surface estate and the current surface owner has owned the surface five years, do the mineral rights now belong to that surface owner, even if he has not owned the surface for a continuous 20 years?
The answer is that the surface owner at the end of a 20 year abandonment period need not have owned the surface for the entire 20 years and may tack onto the ownership period for prior owners of the surface.