Final answer:
The holder of oil and gas rights has the authority to extract resources, lease mineral rights to third parties, and drill exploratory wells. Negotiating royalties typically falls under the initial lease agreements rather than direct discussions with the surface owner.
Step-by-step explanation:
The holder of the oil and gas rights in a dominant estate indeed possesses significant legal authority with respect to the mineral resources under the land. Specifically, such a holder has the right to extract and produce oil and gas from the land, which is a primary activity associated with managing the subsurface mineral estate. In addition to the extraction of resources, the rights holder is typically empowered to lease the mineral rights to a third party, allowing an operator or company specialized in the exploration and development of these resources to undertake these activities. This also includes the ability to drill exploratory wells on the property to assess the potential oil and gas reserves.
However, this rights holder generally does not negotiate royalty payments with the surface owner directly; royalties and compensation for surface use are usually determined by the oil and gas lease or other mineral deed provisions set forth at the time of agreement. As mineral rights can be severed from surface rights, negotiations may involve multiple parties with diverse interests. Regardless of the exploratory success rate or challenges in oil extraction, the legal framework ensures thorough exploration must precede production, similar to preparing the ground before sowing seeds in agriculture, to ensure a successful yield.