B. Moss

Selling Texas Land with an Active Oil Well: What You Should Know

March 13, 2025

Selling land in Texas that contains an oil well comes with specific legal, financial, and environmental considerations. Unlike selling a typical piece of property, this process involves navigating mineral rights, lease agreements, and surface use regulations. Understanding these factors will help you make informed decisions and attract serious buyers.

 

Understanding Surface and Mineral Rights in Texas

In Texas, property ownership is divided into two distinct categories:

  • Surface Rights – Control over the land itself, including any buildings, vegetation, and improvements.
  • Mineral Rights – Ownership of underground resources such as oil, gas, and other minerals.

In many cases, mineral rights and surface rights are separately owned, meaning you could own the land but not the minerals beneath it. If someone else owns the mineral rights, they have the legal authority to extract resources, which may affect how the property is used or developed.

 

Factors to Consider Before Selling Land with an Oil Well

Ownership Structure and Rights

Before selling, determine whether you own both surface and mineral rights. If the mineral rights are owned by another party, they may have the ability to access the property for drilling, which can affect the buyer’s interest and the land’s value.

Existing Oil and Gas Leases

If an oil company has a lease agreement in place, the new buyer will inherit its terms. These agreements typically outline royalty payments, drilling permissions, and access rights. A buyer will want to review the lease details before purchasing the property.

Surface Use Agreements (SUAs)

If mineral rights are owned by another entity, consider negotiating a Surface Use Agreement (SUA) before selling. This agreement specifies how oil companies can operate on the land while minimizing disruption to the surface owner.

Environmental and Safety Compliance

Oil wells come with environmental responsibilities. If the well is still in use, it must comply with state and federal regulations. If it’s inactive, it may need to be properly sealed before selling. Addressing any liability concerns in advance can improve the property’s marketability.

Market Demand and Property Value

The value of land with an oil well varies based on oil prices, demand for drilling, and investor interest. Some buyers see an active well as a financial opportunity, while others may worry about operational disruptions.

 

Steps to Successfully Sell Your Land

Work with Professionals

Selling land with an oil well is complex. Work with real estate agents, attorneys, and industry professionals who specialize in oil-producing properties to ensure a smooth transaction.

Provide Full Disclosure

Transparency is essential. Share all details about existing leases, production history, and any legal obligations. Buyers need to understand exactly what they are purchasing.

Negotiate Favorable Terms

Discuss aspects such as royalty rights, operational responsibilities, and land use limitations to reach an agreement that benefits both parties.

 

Key Takeaways

Know Your Rights – Understanding surface and mineral rights is crucial before selling.
Check Existing Leases – Active agreements with oil companies transfer to the new owner.
Ensure Legal Compliance – Your property must meet environmental and regulatory requirements.
Market Conditions Matter – Oil price trends and demand impact property value.
Seek Professional Guidance – Experienced real estate and legal experts can help navigate complexities.

 

Frequently Asked Questions

Can I sell my land but keep the mineral rights?

Yes. In Texas, it is common for landowners to sell the surface rights while retaining mineral rights. This allows you to continue receiving royalties while transferring ownership of the land itself.

What happens if I don’t own the mineral rights?

If someone else owns the mineral rights, they can legally access your land for drilling. While they must compensate for damages, you cannot prevent drilling activity if the mineral estate holder has legal rights.

How does an existing oil well affect property value?

It depends. A productive oil well may attract investors, while surface disruption and environmental concerns could deter some buyers. The terms of any lease agreements also play a key role.

Do I need to disclose the existence of the oil well to buyers?

Yes. Full disclosure is required. Buyers must be informed about lease agreements, production history, environmental liabilities, and any ongoing obligations.

What is a Surface Use Agreement (SUA), and do I need one?

An SUA outlines how an oil company can operate on your land while ensuring minimal disruption. While not mandatory, having an SUA can provide clarity and protect the landowner’s interests.

 

Final Thoughts

Selling Texas land with an active oil well requires a strategic approach. Whether you own the surface rights, mineral rights, or both, it’s important to understand legal obligations, lease agreements, and market conditions. By working with experienced professionals and ensuring full transparency, you can navigate the process smoothly and secure the best possible outcome.

 

Table of Contents

Selling Concerns

What is the process for selling my land?

Our process is simple and easy. Just fill out our online form or give us a call. We will then schedule a time to view your property and make you an offer.

How much can I sell my land for?

The value of your land will depend on a number of factors such as its size, location, and condition. We will take careful consideration taking into account the market, location and features to provide a fair offer.

How long does it take to sell my land to you?

The value of your land will depend on a number of factors such as its size, location, and condition. We will take careful consideration taking into account the market, location and features to provide a fair offer. We can typically close on a deal within 30 days of receiving your signed contract.

Legal Concerns

What if one of the owners are deceased?

No worries. We are in the business of solving problems. We have worked with this issue on several occasions. Give us a call and we will work closely with you to fill in the appropriate documents to legally sell.

What if I owe a LOT of back taxes or have a lien on my property?

Not an issue. There is still value in your land. We will make you an offer and you will still leave the closing table with funds in your pocket. 

What if I don't have a copy of the deed?

This is not a concern. A deed is a legally recorded document. As long as the property was properly purchased, we can acquire a copy of the deed in the county records.

Closing Concerns

What is a title search and why is it important?

A title search is a process of investigating the ownership history of a property to identify any potential title defects. A title search is important to ensure that the seller has a clear title to the property and can legally sell the land. 

How much will I have to come out of pocket?

You will only leave the closing table with payment for your property. You will not pay for a survey (if one is required) and you will not be responsible for closing costs, which typically is required in a standard sale. We have you covered.

Do I need to be physically present in the city of the property to sell my property?

No, you have the option for an in person closing or a remote closing. You can come in person to the title office to sign the deed and receive payment directly or you can handle the closing remotely in which you will travel to a certified notary to sign necessary documents.

Yes! I'm Ready to Sell My Land

⚠︎ DISCLAIMER:

The contents of this blog are for informational purposes only and should not be taken as legal or tax advice. You should consult a licensed professional for advise on your specific situation. The information in this blog may be changed without notice and is not guaranteed to be complete, correct, or up-to-date. This blog is not intended to be a substitute for professional advice

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