I am new to this forum,but have been reading it for awhile. I own and live on 100 a that is highly improved. I do own 20 percent of the minerals. Xyz oil has leased 60 percent of the minerals and wants to drill 1-3 wells. Xyz offered 5/32, $35a bonus, $1000/ location, $500/ battery which I rejected and they have not offered to negotiate for 5 mo. Xyz has offered for me to participate for $120,000. Depth of well-3400 ft. I have consulted a lawyer and he says I can go nonconsent. I don’t believe either leasing or nonconsent will compensate me for the damages etc. The forum seems to be against nonconsent. Any advice to benefit the most?
If you were in the position where being non-consent would favor you, the operator would still have to compensate you for the surface use [if you own it] and that would be negotiable because if you are non-consent, there is no implied consent to do what is necessary to produce the oil as there would be in most leases.
Ranger,
Do not link the minerals with the surface in your decision. The surface is finite and, man, it is where you live. Therefore its value to you is what you place on it. Protect it first and foremost. the mineral value is speculative and depends on the operator's competence and efficiency. Understand the mineral value separately as you will not control what happens, only the degree of risk you want to take to take in developing the minerals. If you consider a lease, take it to a lawyer to make certain by leasing, you are not committing any surface rights in the mineral lease. I would also make XYZ show me the recorded copies of the leases to confirm the 60% before considering the terms of the surface use agreement.
Gary, I have gone to the courthouse and verified 49 leases. You say to protect the surface, but how can I do this if I go nonconsent? The producer has not offered to negotiate in any way
I don't believe the operator can get a drilling permit without proof of an agreement with the surface owner. That agreement is for your protection. Read some of the 49 leases for mineral rights and the surface use commitments they had to make then put yourself in their place and see if you like how the shoe fits your improved property. If you are enamored by the promises of oil production, figure out how many dry holes or unprofitable wells have been drilled in your immediate area. If the operator is good at getting oil out of the ground and you are good at maintaining your property values, there must be a compromise ALL can make that allows both. If the producer doesn't respect property values, it won't be in business long. As far as I know, the owner gets to make its own rules. GLH
ranger said:
Gary, I have gone to the courthouse and verified 49 leases. You say to protect the surface, but how can I do this if I go nonconsent? The producer has not offered to negotiate in any way
From what I have read, Texas law seems to give all the rules to the producer: 1. only reasonable use is required to produce minerals. 2. No compensation to the surface owner is mandated by law 3. If going nonconsent, the producer can use all kinds of creative accounting during and after the well is paid for to make sure the nonconsent owner gets nothing