Beware of a quid pro quo opportunity. Often, the mineral tenant requires the surface owner to do something that is not allowed in the rental agreement. For example, the oil and gas company may try to facilitate pipelines or facilitate the route through the property in order to obtain another leasing package. This is the ideal time to find a possible agreement on the use of the surface and look for favorable conditions. When an oil and gas company decides to build a well, the company usually leases the portion of the surface area on which the surface owner`s well is located. This lease is considered a recall in a Surface Use Agreement (SUA). The SUA will define the size of the well, the number of wells that can be drilled on it, the obligations and responsibilities of both parties during and after construction, and the amount of compensation to the landowner. Respect legal restrictions when using. Although there are few legal restrictions on a mineral tenant`s right to use land, some protections should be known to the landowner. First, the purchaser has the right to use only the amount of “reasonably necessary” surface land to produce oil and gas from that specific lease (or pool if pooling has occurred). If the use is greater than reasonably necessary (i.e.
the owner uses water from your land to produce oil and gas on another unsurnated land), this is not permitted. Second, the hosting doctrine protects a surface owner with use of the existing surface in certain situations. More information can be found on this blog. Finally, the oil company has no right to be negligent, which means that it is subject to an appropriate operator standard. If any of these restrictions are violated, this may be a good opportunity for the surface owner to engage in a conversation about a surface-use agreement with the lessor, who would probably prefer to sign an agreement rather than face a dispute. First of all, I would like to say that the best way to negotiate surface protection is to negotiate the actual lease of oil and gas between the oil group and the mineral owner. This assumes that the surface owner owns some or all of the minerals and has a “seat at the table” during negotiations. The parties each have something that the other wants and it is possible to conduct real negotiations. Surface protection is an integral part of the lease itself. However, mineral property has often been “separated” from the surface, and the first time the surface owner knows that an oil and gas lease has been tolerated is when the oil company shows up to develop the minerals. In these cases, a Surface Use agreement is probably the best alternative. As a surface owner, you generally cannot prevent the oil and gas company from placing the well site on your land.
However, you can negotiate for the best possible conditions to protect the surface of your property during the life of the LYT, which could easily last 30 years or more. Look for leasing arrangements. If there are already oil and gas leasing provisions that require compensation or protection for the surface owner, this is ideal. These provisions should be applied and can give the owner a good starting point to demand appropriate compensation from the lessor. We have extensive experience in assisting our clients in surface properties during the SUA negotiations, including negotiating conditions related to the following situations: – Request an operational meeting.