Is it Possible to Do a 1031 Exchange of Mineral Rights?

Has anyone ever done a 1031 tax deferred exchange of mineral rights that have been severed from the surface estate?

I am assuming that it is possible to do a 1031 exchange, because mineral rights are part of real estate, but I don’t know anyone who has done it.

Mineral rights are part of what is called the mineral estate as opposed to the surface estate when we talk about real estate.

Here is the problem:  The tax assessors only keep track of who owns the surface of the land.  To find out who owns the mineral rights oil & gas producers hire professional landmen.

A landman’s job is to find the owners of minerals and then to get them to lease the minerals to oil & gas operators for exploration and production.  However, it is sometimes really hard to track down severed mineral owners since you have to go through probate records to determine heirs and then try to find them.  That is hard to do anyway without having to worry about the time constraints of a 1031 exchange.

One of the problems with regard to ownership of severed minerals is that there is no one except the purchasers who keep track of who owns the minerals.  However, the purchasers only keep track of the owners who have producing leases.

Hence, I would assume that 1031 exchanges of “non-productive” mineral rights are probably few and far between.