In addition to the points discussed in this article, taking into account the storage of equipment, transport equipment, salt water disposal wells, entry and exit during production are important issues for surface owners. You`ll want to understand the industry – learn more in our short-term Oil & Gas 101 course. Lease My Land – Short article that explains how to get oil and gas companies to rent your land. Topics covered include mining assets, ownership records, and business research. * Search for rental conditions. If there are already provisions in oil and gas leasing that require compensation or protection for the owner of the surface, this is ideal. These provisions should be applied and can be a good starting point for the owner of the surface to request appropriate compensation from the tenant. Although not immediately intuitive, the interface and associated rights (associated rights) of a particular property can be held separately from the minerals below. This can sometimes surprise a landlord who wants to participate (as if to make money) through an oil and gas lease.
Surface owners can be limited simply by not owning the underlying minerals. This article discusses some of the issues related to the interaction of surface and mineral ownership in relation to oil and gas operations. Suppose John originally owns the surface and mineral rights to his property, and then only sold the surface rights to his brother Jack. Since John has retained his mining rights, he is the person an oil and gas company will turn to to sign an oil and gas lease. Jack`s surface rights are subordinate (secondary) to John`s mineral rights in most states. However, the oil company will have to consider John when it comes to surface operations on this particular stretch of land. A review of your property deed may or may not tell you whether you own the mining rights. A task known as a common title (the mineral title) is the only sure way to determine the property with some degree of authority. By asking a qualified person to execute the title (i.e., investigate), you can determine whether or not the mineral rights were separated by a previous mining transfer. A certain area (area) is required for an oil and gas operator to drill a well and keep it in production throughout the life of the well. In cases where the owner of the surface and ore is one and the same owner and has enough land to operate, oil and gas companies often offer compensation for surface-related problems. Below are examples of different types of surface damage clauses that can be added to a lease (provided they are suitable for a particular situation): Land reclamation – This clause is sometimes included in the lease itself and therefore does not require a separate amendment.
Essentially, he says the oil and gas company will agree to return the country to its original state as it was before drilling, to the best of its ability. There is nothing better than before and after photos to minimize problems in this area. Let`s unpack this a bit to see exactly what we`re getting into with this lease: Pay for surface damage – A surface damage clause is often used when a landlord usually uses their land for farming or income-generating purposes. Most oil and gas companies compensate homeowners for modified production capacity if the owner uses the land for wood, grain, pasture, etc. A third party can be helpful in assessing this value – sometimes landowners and oil companies think a little differently, you don`t know! Let reason prevail. * Request an operational meeting. In advance, it is a good idea to sit down with the tenant of the ore and hold a meeting to discuss operational issues. This includes things like door access, holding doors, working hours, etc.
Some oil and gas companies believe that surface use agreements benefit both parties and are happy to negotiate with the surface owner to avoid any confrontation in the future. By organizing a meeting, the owner of the surface can determine the tenant`s willingness to cooperate. At the very least, a surface owner may be able to obtain maps and details about the scope of future operations on their property. As you can see, there are several ways for a homeowner to feel more comfortable with an oil and gas company using their land. Information, relevance and localized intelligence are your friends. Be sure to start a conversation with the land agent about surface rights clauses that might be appropriate for your situation. As always, understand what your state`s laws may or may not do for you. While the law may or may not be „on your side,“ reasonable and intelligent thinking applied to your lease before signing will serve you best. Unfortunately, many people don`t know the full scope of their oil and gas leases when they sign an oil and gas lease. Perhaps the most important of these oil and gas rights is the right to use the surface of their property for oil and gas development.
Often, this is not always obvious. A recent lease I came across – which is typical of most leases – reads as follows: The trend towards horizontal drilling reduces the amount of space needed to drill an oil or gas well. Damage to the owner`s property of the pure surface has been significantly reduced in some areas, especially in shale terrain games where operators drill multi-well platforms. A ten-hectare drilling site could replace 5 five-hectare drilling sites. Horizontal and directional drilling allows an operator to access minerals under adjacent properties from a nearby location. Therefore, you minimize surface damage. In addition, in many states, the owner of the surface retains the porous space of the formations. This means that you may not have the oil and gas in the ground, but you do have the rock that contains it. This is important when it comes to storing natural gas or disposing of liquids (usually salt water). In states like Texas, storage and disposal agreements are negotiated with and for the benefit of the surface owner.
Site Permit – Sometimes a landowner is advised to establish an approval authority for the precise placement of drilling or surface production operations. A site permit clause is often observed in leases for larger plots. Both the oil and gas company and the ore owner agree on the location of drilling sites, as well as access roads, pipeline easements, etc. On smaller areas, this can be difficult to negotiate. Operators often choose the location of the well based on the recommendations of their geologist and must place the well where they can. The site permit is used less frequently when wells are located in close proximity to each other. This is especially true for vertical drilling. Depending on the region of the country, it may be normal for property (legally called „simple fees“) to include rights to everything – surface, minerals, interstitial space, water, sky, etc. – and the executive power that accompanies their rights. In other words, nothing has been separated, so all rights remain attached to the property and are therefore „transferred“ to the property. However, in other parts of the United States where drilling, mining, or wind energy operations are common, it is not uncommon for property rights to be separated (i.e., separate).
States where minerals (the mineral) are often separated from the area include: Texas, Oklahoma, Pennsylvania, Louisiana, Colorado, New Mexico and others where oil and gas have been produced for decades. A surface use agreement is a voluntary agreement between the surface owner and the owner/lessee of the ore (usually an oil and gas company) that governs the relationship between the two parties. In some states, such as Oklahoma and New Mexico, oil and gas companies are required by law to enter into these agreements before starting production. In Texas, unfortunately, there is no such legal protection for surface owners. Mining tenants are not required to enter into such an agreement, but are often willing to do so in order to have a good working relationship with the owner of the surface. .