Gas Well drilling causes loss of use of property - How do I show this on income tax?

I signed a contract to allow drilling for gas on my property for a dollar amount, on which they subsequently drilled several wells. At the end of the year they sent me a 1099 showing that amount as ‘other income’. It was my understanding that this amount was to be considered damages. They used several acres for the wells, equipment etc… How do I show this money received and damages on my income tax return?