## Facts

- The dispute involved approximately 408 acres in Sonoma County, California, in an area known as The Geysers.
- In 1951, a deed conveyed to the grantee’s successor (Kinetics) “all minerals in, on or under” the property, while the grantors retained the surface estate.
- George and Hazel Curry later acquired the surface estate.
- In 1963, the Currys leased to Magma Power Company and Thermal Power Company (later partly assigned to Union Oil) rights to drill for and produce steam, steam power, and “extractable minerals” from the land.
- Kinetics claimed the only valid mineral interest under the 1951 deed and asserted that the Currys’ lease could not convey mineral rights they did not own.
- In 1973, Kinetics drilled a geothermal well on the property at an approximate cost of $400,000.
- Kinetics filed an action to quiet title to geothermal steam, geothermal power, and geothermal resources beneath the property.

## Issues

1. Whether a deed granting “all minerals in, on or under” land includes geothermal resources, including geothermal steam and related power.
2. If geothermal resources are included within the mineral grant, whether the surface owners and their lessees lack authority to lease geothermal production rights.

## Decision

- The Court of Appeal affirmed the judgment quieting title in favor of Kinetics.
- The court held that geothermal resources, including steam derived from them, fall within a general grant of “all minerals in, on or under” the property absent limiting language.
- Because the Currys held only the surface estate, their lease could not convey geothermal rights classified as mineral rights.

## Legal Principles

- A broad conveyance of “all minerals in, on or under” land is construed to include geothermal resources (including steam and the heat-bearing medium) unless the instrument contains limiting language.
- In construing “minerals,” courts may consider the nature of the resource and the method of development; resources accessed through drilling and subsurface extraction are commonly treated as mineral interests.
- A surface estate owner cannot lease or convey subsurface mineral rights the owner does not possess; such purported grants are ineffective against the mineral estate holder.

## Conclusion

The court concluded that geothermal resources are part of the mineral estate under a general “all minerals” grant, so title to geothermal steam, power, and related geothermal resources belonged to the mineral rights holder rather than the surface owners and their lessees.


Geothermal Kinetics, Inc. v. Union Oil Co. of Cal., 75 Cal. App. 3d 56 (Ct. App. 1st Dist. 1977)