Mineral rights in Indiana are governed by Indiana property and oil and gas law and regulated by the Indiana Department of Natural Resources, Division of Oil and Gas (IDNR). Whether a severed interest can lapse from non-use, how oil and gas production is taxed, and how land is legally described all follow Indiana-specific rules — set out below with the Indiana authorities that govern them.
The DNR Division of Oil and Gas permits Indiana wells and publishes the production records we check on every Indiana evaluation. IDNR.
Indiana Code § 32-23-10-2 provides that “an interest in coal, oil and gas, and other minerals, if unused for a period of twenty (20) years, is extinguished and the ownership reverts to the owner of the interest out of which” it was carved — unless a statement of claim is filed. The lapse is self-executing: no lawsuit and no individual notice is required, and the U.S. Supreme Court upheld exactly this design in Texaco, Inc. v. Short (1982), holding that publication of the statute itself is constitutionally adequate notice. "Use" is defined broadly — production, injection or storage operations, rentals or royalties paid, operations on a pooled or unitized tract, and payment of taxes on the mineral interest by its owner. Because Indiana already assesses producing interests as real property, an owner who simply pays the county mineral tax bill each year is continuously resetting the clock. (See IC 32-23-10-2.)
The petroleum severance tax is computed both ways per return, and you owe the higher. At any oil price above roughly $24 a barrel or gas above about $3.00 per Mcf, the 1% leg governs:
Confirm your own position with a CPA — this is published reference, not tax advice.
Indiana defines real property to include an estate, right, or privilege in minerals including oil or gas where distinct from surface ownership, and prescribes a uniform valuation method: average daily production times a Board-established posted price times 365, divided by three to reach assessed value. Schedules are filed per lease with the assessor each year showing each taxpayer's proportionate interest. Notably, the regulation assigns royalty and overriding royalty interests a 1.50 factor over working interests because they bear no part of lease expense — an explicit regulatory acknowledgement that a royalty is worth more per unit of production. Paying this bill also counts as statutory "use" that resets the twenty-year lapse clock.
Indiana is a rectangular-survey state. The Second Principal Meridian governs the great majority of the state including all of the southwestern Illinois Basin oil counties, with the First Principal Meridian along the eastern edge. Three colonial-era overlays are described by tract and lot rather than section — the Vincennes Tract in Knox County, Clark's Grant in Clark and Floyd, and the Gore in the southeast.
Oil and gas activity in Indiana is concentrated in these plays and basins:
The facts above — who regulates, whether an idle interest can lapse, how production is taxed, and how land is described — are the Indiana-specific rules that shape what you own and how it is protected. For the doctrines behind them see oil and gas law and the rule of capture; to compare states, see mineral rights by state. Buckhead Energy buys Indiana mineral and royalty interests and prices them on the same regulator and production records described here. This is educational background, not legal advice; Indiana oil and gas law is fact-specific, so consult a qualified Indiana attorney about your interest.
Indiana Mineral Rights & Counties
Oil & Gas Encyclopedia — all terms
Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.
Yes, in principle — but it is easy to prevent. Under Indiana Code Section 32-23-10-2, a mineral interest unused for twenty years is automatically extinguished and reverts to the surface owner unless a statement of claim is filed — a self-executing lapse the U.S. Supreme Court upheld in Texaco, Inc. v. Short (1982). But "use" is defined broadly: production, injection or storage, rentals or royalties, operations on a pooled or unitized tract, and paying property taxes on the mineral interest all count. Because Indiana assesses producing interests as real property, an owner who simply pays the county mineral tax bill each year continuously resets the twenty-year clock.
Indiana Department of Natural Resources, Division of Oil and Gas. The DNR Division of Oil and Gas permits Indiana wells and publishes the production records we check on every Indiana evaluation.
The petroleum severance tax is computed both ways per return, and you owe the higher. At any oil price above roughly $24 a barrel or gas above about $3.00 per Mcf, the 1% leg governs:
Indiana is a rectangular-survey state. The Second Principal Meridian governs the great majority of the state including all of the southwestern Illinois Basin oil counties, with the First Principal Meridian along the eastern edge.
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