The 'Hidden' Value of Mineral Rights: What's Under Your Development Tract?

When you're evaluating a 50-acre tract in Denton County or a 100-acre parcel in Wise County, you're probably thinking about soil tests, water access, road frontage, and zoning. That's the surface-level checklist, literally. But the real wildcard? What's underneath.

Mineral rights are the most overlooked piece of the land puzzle, and they can turn a "slam dunk" development deal into a legal nightmare faster than you can say "horizontal drilling." In North Texas: especially in counties with a long history of oil and gas production: what's under your property can be just as important as what's on top of it.

Surface vs. Mineral: The Split Estate Problem

In Texas, you can own the surface rights (the dirt, the trees, the right to build) without owning the mineral rights (the oil, gas, and other subsurface resources). This is called a "split estate," and it's more common than you'd think.

Here's the kicker: mineral rights are the dominant estate in Texas. That means if someone else owns the minerals under your land, they have the legal right to access them: even if that means drilling a well, running a pipeline, or putting a tank battery right in the middle of your future cul-de-sac.

For a residential developer, that's a dealbreaker. You can't sell homes in a subdivision if there's a gas well sitting on Lot 12, and no lender is going to finance a project where the mineral owner has superior rights to access the property.

Why Wise and Denton Counties Are Ground Zero

Wise and Denton counties sit right in the heart of the Barnett Shale, one of the most productive natural gas plays in North America. For decades, energy companies have been leasing and drilling across these counties, and that legacy shows up in the chain of title for almost every tract.

Even if a property hasn't been actively drilled in years, there's a good chance the mineral rights were severed decades ago. Maybe a rancher in the 1960s sold off the minerals to an oil company. Maybe a family inherited the surface but not the minerals. Either way, when you're looking at land for development, the odds are high that someone else owns what's underneath.

In Denton County, the proximity to major population centers (Denton, Lewisville, Flower Mound) makes the stakes even higher. Developers are paying top dollar for land that's close to infrastructure and schools, but if the mineral rights aren't locked down, the entire project can fall apart.

The Surface Waiver: Your First Line of Defense

The best-case scenario? The mineral owner has signed a surface waiver. This is a legal agreement where the mineral rights holder waives their right to use the surface for exploration or production. Essentially, they agree to access the minerals only from off-site (think: horizontal drilling from a neighboring tract).

A strong surface waiver protects the developer and gives lenders the confidence they need to finance the project. Without one, you're rolling the dice.

Here's what to look for in a solid surface waiver:

• Prohibition on surface use: The mineral owner cannot access the surface for any drilling, roads, pipelines, or facilities.
• Horizontal drilling only: If they drill, it must be done from an adjacent property.
• No damages to improvements: Any subsurface activity that damages homes, streets, or utilities triggers compensation.

If you're buying a tract for development and there's no surface waiver in place, you need to either negotiate one with the mineral owner before closing: or walk away.

The Due Diligence Checklist

Most buyers don't think about mineral rights until it's too late. They sign the contract, do the engineering studies, get the plat approved, and then: boom: discover that a gas company owns 50% of the minerals and has the right to drill.

Here's the checklist we run through at Cooper Land Company before recommending a development tract:

1. Title search for mineral ownership: Who owns the minerals? Is it the seller, or is it a third party?
2. Review of existing leases: Is the property currently under lease to an energy company? When does the lease expire?
3. Check for active wells or permits: Are there any producing wells on the property or nearby?
4. Surface waiver status: Does a waiver exist? If so, is it recorded and enforceable?
5. Operator track record: If there's active drilling nearby, who's the operator? What's their reputation for working with landowners?

This isn't a quick Google search. It requires a deep dive into county records, plat maps, and lease agreements. If you're not working with a title company that understands mineral rights, you're asking for trouble.

When "Fully Drilled" Doesn't Mean "Safe"

Some buyers assume that if a tract is in a "fully drilled" area: meaning most of the nearby parcels have already been developed for oil and gas: they're in the clear. Not quite.

Even in mature fields, new drilling techniques (like re-fracking or targeting deeper formations) can bring operators back to areas they abandoned years ago. And if the mineral owner still holds the rights, they can exercise them: development plans be damned.

I've seen this play out more than once. A developer buys a 40-acre tract in Wise County, plats out 120 lots, and starts grading roads. Two months in, an oil company shows up with a drilling permit for a well in the middle of the site. The developer has no recourse because the mineral owner never signed a surface waiver.

The project stalls. The lender pulls out. The lots sit vacant. It's a $2 million mistake that could've been avoided with a $5,000 title review.

Proximity Matters: The "Nearby Drilling" Premium

One hidden factor that impacts value? Drilling activity in the surrounding area. If rigs are popping up in your county or adjacent tracts are under active lease, mineral buyers see upside potential. That can actually increase the complexity of negotiating a surface waiver because the mineral owner knows their rights might be worth more in the near future.

On the flip side, if the area has seen little to no activity in recent years, mineral owners are often more willing to grant waivers. They know their rights are speculative at best, so they'd rather lock in a small payment now than hold out for a drilling project that may never come.

Understanding the local drilling climate: who's operating, where they're leasing, and what formations they're targeting: gives you leverage in these negotiations.

The Cost of Getting It Wrong

Let's put this in real numbers. Say you buy a 60-acre tract in Denton County for $1.5 million with plans to develop a 100-lot subdivision. You skip the mineral rights review because everything "looks clean" on the surface.

Eighteen months later, after you've spent $400,000 on engineering, platting, and infrastructure, a gas company files for a drilling permit. The project stops. You can't sell lots with an active well on-site, and no builder will touch it.

Your options:

• Walk away: Lose $1.9 million.
• Negotiate a buyout: Try to purchase the mineral rights (which the owner now knows are critical to your project, so expect a premium).
• Redesign the site: Shift the lots away from the well location, reducing your unit count and profit margin.

None of these are good outcomes. And all of them were avoidable with proper due diligence upfront.

Practical Steps for Buyers and Developers

If you're serious about buying land for development in Wise, Denton, or any other county with a history of oil and gas production, here's the playbook:

1. Make mineral rights a contingency: Write the contract with a 30-day review period specifically for mineral rights and surface waivers.
2. Hire a competent title company: Not all title companies understand mineral rights. Find one that does.
3. Get a surface waiver before closing: If the minerals are severed, don't close until the mineral owner signs a waiver: or you negotiate a purchase of the rights outright.
4. Talk to neighboring landowners: Ask if they've had any issues with drilling or lease negotiations. Local knowledge is gold.
5. Budget for legal review: Pay an oil and gas attorney to review any leases or waivers. It's a fraction of the cost of a derailed project.

The Bottom Line

In North Texas, you're not just buying dirt: you're buying a vertical column that goes all the way down to the center of the earth. And if someone else owns what's underneath, your plans for what's on top don't mean a thing.

At Cooper Land Company, we've been through enough title reviews to know where the landmines are buried. Before we recommend a tract for development, we make sure the mineral rights are either owned by the seller or locked down with an airtight surface waiver.

Because the only thing worse than paying too much for land? Paying a fair price for land you can't actually use.