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Recombining Surface and Severed Mineral Rights

North Dakota law specified a procedure whereby surface owners can acquire ownership of unused severed mineral interests. The law also specified how owners of severed mineral interests can retain ownership of the mineral rights even though the minerals are not leased or being developed.

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A question occasionally asked is whether a surface owner is able to acquire ownership of severed mineral rights that underlie the surface owner's land.  The answer is "yes"; North Dakota law provides a process by which surface owners can acquire ownership of underlying mineral rights in certain situations -- with emphasis on "in certain situations".  This page briefly introduces this North Dakota law.

The law described on this page is underpinned by a long-standing legal concept that a property owner is expected to oversee, manage, protect, and use their property; if the owner fails to use their property for an extended period, the owner is subject to lose their property rights to someone else who is willing to "act like the owner" of the property, that is, to someone who is willing to use the property, protect the property interest from trespassers, pay relevant taxes, or engage in other acts of ownership.  Related legal concepts include adverse possession and prescription.

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N.D.C.C. chap. 38-18.1  Termination of Mineral Interest

Note:  this statute does not apply to unused mineral interests owned by the surface owner.  A surface owner retains ownership of underlying mineral rights that the surface owner already owns even if the mineral rights are "unused."

Note:  this statute does not apply to unused severed mineral interests owned by government; this limitation is consistent with the long-standing legal concept that adverse possession and prescription do not apply to government-owned land.

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North Dakota law specifies a procedure by which surface owners can acquire ownership of unused severed mineral rights.  This law also specifies how the owner of severed minerals can retain ownership of those minerals even though the mineral interests have not been leased nor are being developed or produced.  This law does not allow someone who does not own the surface to acquire ownership of unused mineral rights; that is, I cannot acquire ownership of the unused severed mineral rights that underlie my neighbor's land.

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"Any mineral interest is, if unused for a period of twenty years ... deemed to be abandoned ...Title to the abandoned mineral interest vests in the owner ... of the surface estate ... under which the mineral interest is located..."

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A mineral interest is deemed to be used when at least one of the following conditions is met:

    • any mineral is being produced [note: payment of royalties or a bonus payments to an account on behalf of a person (such as, mineral right owner) who cannot be located is not deemed a use of the mineral rights]
    • water, gas or other fluid is being injected, withdrawn, stored, or disposed [comment: despite the language of this statute, operating a water well is not likely to be considered a use of a mineral interest]
    • a solid mineral is being produced from a common vein owned by the mineral interest owner
    • the mineral interest is subject to a lease, mortgage, assignment, or conveyance of the mineral interest recorded in the office of the recorder in the county in which the mineral interest is located; a lease given by a trustee is considered valid and likely to be  considered a "use" of the mineral interest
    • the mineral interest is subject to an order or agreement to pool or unitize, recorded in the office of the recorder in the county in which the mineral interest is located
    • taxes are paid on the mineral interest by the mineral interest owner
    • a proper statement of claim is recorded  [comment:  it is this last option that may be of most interest to an owner of unused severed mineral rights].

If any of these conditions or uses are met, the mineral rights are NOT considered unused or abandoned, and are NOT subject to be transferred to the surface owner.  Conversely, mineral rights that are not used in any of the listed manners are considered unused and subject to the consequence of being deemed abandoned.

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Statement of Claim

Owners of severed mineral rights can protect their property interest by filing a statement of claim.  The statement must be recorded in the office of the recorder in the county in which the mineral interest is located; the statement must be recorded by the owner of the mineral interest before the end of twenty years of non-use. The statement must contain the name and address of the owner of the mineral interest, a legal description of the land where the mineral interest is located, and the type of mineral interest.  A joint tenant may record a claim on behalf of oneself and the other joint tenants; however, each tenant in common must file their own statement of claim.

A "statement of claim" form is available at https://www.dmr.nd.gov/oilgas/statementclaim.pdf .

Filing a statement of claim is perhaps the most direct means of preserving ownership of severed mineral rights that are otherwise unused.

 

Procedure for Surface Owner to Follow

 
A surface owner wanting to claim ownership of unused severed minerals underlying the surface owner's land must complete several legal steps.
 
The surface owner will want to first check the public record to determine if there is any indication as to the ownership and use of the mineral interest. 
 
 
Provide Notice
 
If the surface owner is convinced the mineral interest has been unused for at least twenty years, the next step is for the surface owner to give notice of the lapse of the mineral interest by publication once each week for three weeks in the official county newspaper in which the mineral interest is located.  However if the address of the mineral interest owner is part of the public record or can be determined upon reasonable inquiry, the surface owner must also mail a copy of the notice to the owner of the mineral interest within ten days after the last published notice.
 
To constitute a reasonable inquiry, the surface owner must search:
a. the county recorder's records for the existence of any uses by the owner of the mineral interest;
b. the clerk of court's records for the existence of any judgments, liens, or probate records which identify the owner of the mineral interest;
c. the social security death index for the last-known residence of the owner of the mineral interest, if deceased; and
d. one or more public internet databases to locate or identify the owner of the mineral interest or any known heirs; the surface owner is not required to conduct internet searches on private fee internet databases.
 
The surface owner's notice must state:
a. the name of the record owner of the mineral interest;
b. a description of the land on which the mineral interest is located; and
c. the name of the surface owner providing the notice.
 
A copy of the notice and an affidavit of service of the notice must be recorded in the office of the recorder of the county in which the mineral interest is located and constitutes prima facie evidence that such notice has been given.
 
 

Response by Mineral Owner

 
The owner of record of the mineral interest who within sixty days after first publication of the notice can block the surface owner's proceeding by:
a. Filing a statement of claim with the county recorder ; or
b. Filing with the county recorder documentation that at least one of the activities took place during the twenty-year period immediately preceding the first publication of notice.
 
A person other than the record owner of the mineral interest (such as an heir of the record mineral owner) who files with the county recorder within sixty days after first publication of the notice an affidavit under oath that explains the factual and legal basis for the person's assertion of title to the mineral interest also blocks the surface owner's proceeding. The sworn explanation must be accompanied by documentation supporting the assertion of ownership or explaining why documentation is unavailable.
 
 

Documenting the Surface Owner's Acquired Ownership

 
The statute allows the surface owner to record a statement of succession in interest indicating that the surface owner has succeeded to the ownership of the mineral interest (see N.D.C.C. 38-18.1-02), but ownership of the mineral interest by the surface owner is not yet perfected (see N.D.C.C. 38-18.1-06.1).  After publishing notice, mailing notice if needed, and filing an affidavit of service, the surface owner may then initiate a quiet title action in district court in the county in which the minerals are located (see N.D.C.C. chap. 32-17). The surface owner shall submit evidence to the district court establishing that all procedures were properly completed and that a reasonable inquiry was conducted. If the district court finds that the surface owner has complied with all procedures and conducted a reasonable inquiry, the district court shall perfect title to the mineral interest in the surface owner.
 
A judgment obtained by the surface owner is deemed conclusive, except for fraud, misrepresentation, or other misconduct. The surface owner which obtains a judgment and subsequently leases minerals to a lessee is entitled to retain all lease bonus, royalties, or other proceeds paid to the surface owner under the lease even if the the judgment is subsequently vacated.  The mineral lessee that leases from the surface owner which has obtained a judgment to the minerals, is deemed a bona fide purchaser and the lease remains in effect even if the judgment is subsequently vacated. Further, the mineral lessee is not liable to any third party for lease bonus, royalties, or other proceeds paid to the surface owner under the lease before the judgment is vacated.
 
 

Summary

 
There is a procedure for a surface owner to acquire ownership of unused severed mineral rights, but there also is an opportunity for the owner of the unused severed mineral rights to preserve their ownership even after the surface owner has initiated the legal process of claiming the unused mineral rights.  Filing a statement of claim is one method for owners of unused severed mineral interests to preserve the ownership interest.
 
 

Email: david.saxowsky@ndsu.edu

This material is intended for educational purposes only. It is not a substitute for competent legal counsel. Seek appropriate professional advice for answers to your specific questions.

This material is protected by U.S. copyright laws.

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