The effect of mineral interests on land appraisals in the shale-gas regions: The case of the Barnett shale

Mineral interests and the issues that appraisers must consider in regions impacted by shale-gas formations are the subject of this paper. The Barnett Shale in north central Texas is the example; however, the issues and concepts apply to many states with shale-gas formations. We emphasize the need for appraisers to focus on mineral estates attached to or severed from subject properties when valuing land. The effects of severing the mineral estate from the surface estate and the resulting value implications, including the dominance of the mineral estate, are major topics in this paper. We conclude with an example of the sales comparison approach to estimating the value of land with and without the underlying mineral estate.