Mineral rights in Michigan are governed by Michigan property and oil and gas law and regulated by the Michigan Department of Environment, Great Lakes, and Energy (EGLE). Whether a severed interest can lapse from non-use, how oil and gas production is taxed, and how land is legally described all follow Michigan-specific rules — set out below with the Michigan authorities that govern them.
EGLE's Geologic Resources Management Division — formerly the Oil, Gas, and Minerals Division — permits Michigan wells and holds the records we check on every Michigan evaluation. EGLE.
This is the harshest dormancy structure in the country and the reason Michigan deserves attention before anything else. An interest in oil or gas owned by someone other than the surface owner, which has not been sold, leased, mortgaged, or transferred by recorded instrument for twenty years — absent a drilling permit, actual production from the land or from lands pooled or unitized with it, or gas storage use — is deemed abandoned and vests in the surface owner, unless the owner records a claim of interest within that period. No lawsuit by the surface owner is required and no individual notice is given. The Michigan Supreme Court upheld the statute in 1980. Note it is limited to oil and gas interests and is not a general all-minerals lapse act. A quiet, inherited, never-leased Michigan interest is the one most likely to have already been lost on paper. (See MCL 554.291.)
The tax is withheld at the wellhead by the purchaser and remitted to Treasury:
Production attributable to the State of Michigan or the United States is excluded, and a 4% rate applies to qualifying carbon-dioxide enhanced recovery projects. Certain Antrim and Devonian shale production tied to a state-sold royalty interest is exempt. Confirm your own position with a CPA — this is published reference, not tax advice.
Michigan statute makes the severance tax in lieu of all other state or local taxes upon the oil or gas, the property rights attached to or inherent in them, all leases or rights to develop, and the values created by them. Two carve-outs remain: machinery, pipelines, tanks, and other operating equipment are still taxable, and the exemption does not relieve corporations from franchise or privilege taxes.
Michigan is a rectangular-survey state surveyed wholly under the Michigan Meridian, with its base line across the southern Lower Peninsula. Both peninsulas key to that one meridian, so Michigan calls do not carry a meridian qualifier the way multi-meridian states do. Private claims survive along the Detroit and St. Clair rivers and around Mackinac from the colonial period and are described by claim number rather than section.
Oil and gas activity in Michigan 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 Michigan-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 Michigan mineral and royalty interests and prices them on the same regulator and production records described here. This is educational background, not legal advice; Michigan oil and gas law is fact-specific, so consult a qualified Michigan attorney about your interest.
Michigan 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.
This is the harshest dormancy structure in the country and the reason Michigan deserves attention before anything else. An interest in oil or gas owned by someone other than the surface owner, which has not been sold, leased, mortgaged, or transferred by recorded instrument for twenty years — absent a drilling permit, actual production from the land or from lands pooled or unitized with it, or gas storage use — is deemed abandoned and vests in the surface owner, unless the owner records a claim of interest within that period.
Michigan Department of Environment, Great Lakes, and Energy. EGLE's Geologic Resources Management Division — formerly the Oil, Gas, and Minerals Division — permits Michigan wells and holds the records we check on every Michigan evaluation.
The tax is withheld at the wellhead by the purchaser and remitted to Treasury:
Michigan is a rectangular-survey state surveyed wholly under the Michigan Meridian, with its base line across the southern Lower Peninsula. Both peninsulas key to that one meridian, so Michigan calls do not carry a meridian qualifier the way multi-meridian states do.
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