Ownership-in-Place Theory – used in a majority of jurisdictions: holds that the owner has the right to present possession of the oil and gas, as well as the right to use the land surface to search, develop, and produce from the property, but that the interest in the minerals terminates if the oil and gas flows out from under the owner’s land

ownership-in-place theory:
(1928)

1. Oil & gas. A characterization of oil-and-gas rights used in a majority of jurisdictions, holding that the owner has the right to present possession of the oil and gas in place as well as the right to use the land surface to search, develop, and produce from the property, but that the interest in the minerals terminates if the oil and gas flows out from under the owner’s land.  *  This theory is used in Texas, New Mexico, Kansas, Mississippi, and other major producing states.  The rights of a severed-mineral-interest owner to oil and gas in these states are often described as an estate in fee simple absolute, but ownership of specific oil-and-gas molecules is subject to the rule of capture.  See also NONOWNERSHIP THEORY. [1]

References:

Disclaimer: All material throughout this website is pertinent to people everywhere, and is being utilized in accordance with Fair Use.

[1]: Black’s Law Dictionary Deluxe Tenth Edition by Henry Campbell Black, Editor in Chief Bryan A. Garner. ISBN: 978-0-314-61300-4

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