Yesterday, in discussing the Pennsylvania Supreme Court’s grant of review in Butler v. Estate of Powers, we suggested that maybe it was time to do away with the rebuttable presumption that the owner of “mineral rights” does not own rights in a property’s natural gas stores and instead make it a firm rule of law, particularly in light of the fact that the presumption has been around for over a century.    Well, last week, this is exactly the step that the Supreme Court of Arkansas took in Staggs v, Union Pacific RR Co., 2012 Ark. 156 (Apr. 12, 2012), although holding that “mineral rights” do include oil and gas rights. 

Under Arkansas case law, ambiguity as to what substances were included within a general reservation or grant of mineral rights had always been interpreted in light of the intent of the parties at the time the deed was executed.  At issue in the case was a deed executed in 1934 conveying certain land, now owned by the Staggs, but reserving “all the minerals” on or in the land.  The trial court granted summary judgment to the defendants, holding that Arkansas law had long recognized that “mineral rights” included oil and gas rights.  Plaintiffs appealed, contending that the trial court was required to hold an evidentiary hearing on the factual issue of the intent of the parties.

Not necessary said the Arkansas Supreme Court.  Looking at case law from the late 1930’s, the Court found that some time after the turn of the century, it became “common knowledge in Arkansas that a reservation of mineral rights included oil and gas.”  Moreover, the Court looked at case law dating from 1912, finding that “natural gas is a mineral.”  Based on this history, the Arkansas Supreme Court had no hesitation in concluding that an evidentiary hearing was unnecessary, and that a 1934 grant of mineral rights included oil and gas rights. 

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