Oil & Gas Interests

Oil and gas are considered a part of the corpus of the real property and have the same character as the surface estate.

Royalties and bonuses paid have the same character as the land from which they are extracted. They are considered as a “piecemeal sale” of the land.

Norris v. Vaughan, 260 S.W.2d 676 (Tex. 1953).

Note: However, rental payments are not considered payment for extraction or production of the minerals. Thus, renal payments paid, such as deferred production, are considered income from the property and if received during marriage are community property regardless of the character of the land.