Question 1

I own the land. Do I own the gas under it?

Accepted Answer

Not necessarily. In Pennsylvania the oil and gas can be a separate estate from the surface. If a prior owner sold or reserved it, someone else may own it even though you own the surface and pay the taxes. And under the Dunham Rule, an old deed that reserves "minerals" usually does not include the oil and gas unless it names them.

Question 2

Is one-eighth the most I can get for a royalty?

Accepted Answer

No. One-eighth (12.5%) is the legal floor under the Guaranteed Minimum Royalty Act, not a ceiling. You can negotiate more, and in strong markets landowners have signed leases at one-sixth or higher.

Question 3

Why is my royalty check smaller than one-eighth of the sale price?

Accepted Answer

Because Pennsylvania values the royalty at the wellhead. Producers may be able to deduct a proportionate share of post-production costs, gathering, compression, processing, and transportation, before they pay, where the lease allows it and the net still clears one-eighth. Whether your particular clause allows those deductions can be contestable. The Pennsylvania Supreme Court agreed to hear that question in Dressler Family, LP v. PennEnergy Resources, LLC, on February 15, 2023, but the appeal was discontinued on September 7, 2023, so no Supreme Court opinion issued. The Superior Court ruling of April 29, 2022 stands, and the Supreme Court has not resolved how a clause of this mixed kind is to be read.

Question 4

My old oil and gas lease has not produced in years. Can I get out of it?

Accepted Answer

Maybe. A lease held only "so long as" there is production in paying quantities can end when production stops, but the operator gets the benefit of a good-faith business judgment, and delay rentals alone generally do not hold it past the primary term. It often takes a quiet-title or contract action to clear a dead lease off your title.

Question 5

My water went bad after nearby drilling. What are my rights?

Accepted Answer

Pennsylvania presumes the operator responsible for pollution of your supply if it sits within 2,500 feet of an unconventional well and the pollution appears within 12 months of the latest drilling, completion, stimulation, or alteration, unless the operator proves a statutory defense. An operator that pollutes or diminishes your supply must restore or replace it. An independent baseline water test, taken before drilling starts, is what turns that presumption into a claim you can prove.

Question 6

I inherited mineral rights. What did I actually get, and is it taxed?

Accepted Answer

Oil and gas in the ground are real property and pass by will or intestacy like land, though a royalty under an existing lease can be personal property. On the Pennsylvania inheritance tax return, the Department of Revenue requires all mineral and natural gas rights to be reported on Schedule E (REV-1508) at date-of-death value, even though the interest itself is real property (Inheritance Tax Bulletin 2012-01). Pennsylvania has no statute that extinguishes severed mineral rights for non-use, so the rights do not lapse just from sitting idle.

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