Oil, gas and wind: property acquisition and leasing rights in Oklahoma

As wind energy competes with traditional oil and gas production, Oklahoma property disputes can develop.

Energy production in Oklahoma is big business. Traditionally oil and gas wells have made the ownership of mineral interests more important that surface rights. The fledgling wind industry may change things.

According to National Public Radio, Oklahoma is fourth in the nation when it comes to the production of wind energy. A common sight in the western parts of the state, wind farms are moving into the northeast corner of the state. However, they face some resistance from environmentalists and oil interests.

Property ownership basics

Ownership of property may be in freehold or leasehold estates. A freehold will last into the indefinite future. Leaseholds last a certain number of years and may be limited to specific uses described in a contract. Usually wind projects use multi-year leases rather than outright purchases.

Vertical division of ownership is quite common in Oklahoma. One person owns surface rights and another owns the mineral rights. The right to minerals is an incorporeal interest. This means that the minerals are not owned until captured. Some oil and natural gas is not accessible by current technology, but innovation may make these rights valuable in the future.

A possible dispute may develop if an owner of mineral rights believes a wind farm will block oil and gas access below ground. A balance needs to develop between the newer wind industry and vital oil and gas industry. Oklahoma has discussed stricter rules for wind, but often wind turbines and oil wells may be able to co-exist on the same parcels.

Quiet title and common disputes among owners

In some cases, ownership may not be clear-cut and property disputes can develop. When evidence suggests that there might be multiple owners, a quiet title action may be necessary. For an out-of-state landowner who wants to lease a portion of a parcel to a wind operation this could come up.

One risk when absent from a property is the doctrine of adverse possession. This issue comes up when an individual claims actual, open, notorious, exclusive and continuous possession of a property for fifteen years. Granting easements, putting up locked gates, using pasture for cattle grazing and hunting or paying taxes are all examples of open and actual uses. However, if the owner grants access, it becomes permissive. If both parties access the property (mixed or dual possession), possession would not be exclusive.

Proving an adverse possession claim depends on the circumstances of particular case. The burden of proof rests with the person claiming title adversely. The presumption favors the titleholder in questionable cases.

This adverse possession concept could come up when selling a parcel, granting an easement to an oil or gas company or negotiating leasehold rights for windmill operations.

When several people use a parcel, determining ownership can be difficult. Seeking the counsel of a business law attorney in the acquisition, sale or lease of Oklahoma property can avoid future litigation.

Keywords: Property issues, acquiring mineral rights, easements, leasing deals