Strange question - North Dakota. O&G Lease signed, Surface Damage and Use Agreement not signed because of disagreements with the landman. The well has been completed and in production for quite some time. Fast forward, new company acquired the well and now they want to sign ROW, which is very skimpy. I am wondering possibility of putting a lien on the well.
AB, I'm on your side in this but I'm going to ask something that may sound like I'm not and I want you to be prepared. If you don't have a surface use agreement, why on earth did you let them do all the construction on your land? You are in an extremely poor position as to the well in my opinion. You and your lawyer should have kicked up a fuss long before this and if surface use could not be agreed on, you should have had your day in court to set the price. In my opinion they are laughing at you. When you finally get to court they will probably argue that your surface wasn't even valuable enough for you to bother with trying to stop them until you had been paid. That's water under the bridge and you will eventually, probably get whatever anyone else in the area got but you now have no input on where the road goes and so forth because it's there.
If I understand correctly, they now want to install a gathering line. This is your second chance in my opinion. They do not want to have to truck all the oil because that would be expensive. I do not think you have to grant them an easement for their gathering line.
Do not let them start work on the pipeline before you have been paid for the surface use and the pipeline. In my opinion, you couldn't stop them from drilling a well, and building a road because they had the right to produce the minerals and the law would have given them that access but you should have already been paid for that. The gathering line is a different story to me. The gathering line is for TRANSPORTING the already produced minerals. The law says they have to be able to access and produce the minerals but I don't think it says you have to help them transport the minerals. They already have a road, they can get the oil out. They are not your brother in law, you are not responsible for making sure they make money.
If the operator has to truck the oil for awhile, it will probably cut into everyones royalty a small amount until you have agreements in place but you should have been paid for the use of your surface long since.
I think you are eventually going to let them install the pipeline but you need to have all agreements done first including the well and road, surface use. On the pipeline easement, you need to study what you want. The basics are, Non-exclusive so they can't stop or extort money for another pipe, water or power lines to cross your land because that money should go to you. Single use [1 pipe]. Buried below plough depth. Permanent easement to be the width of the pipe because if they come back and tear the surface up again, they need to pay again. No surface appurtenances.
I would also want a yearly rental, possibly $2,000 a year pegged to the price of electricity, because electricity is the fastest rising commodity that can easily be ascertained, because the damages pay for the damages to the land and inconvenience, not for the continued use of the land.
The deal is what you and the operator agree it is. I would suggest that you get some experienced help in these negotiations because if they actually put in some effort and not just rubber stamp it, they should make you more money than they cost. You have to explain to them that you don't just want them to look over whatever is offered but that you want whatever the market will bear or they are fired. There are leaches up there who will take your money to rubber stamp the first offer made, both lawyers and oil and gas professionals and it's your job to watch them.
My advice is to kick up a fuss and do not let them begin the pipeline until you have been paid, for everything. If they claim they will get eminent domain, laugh at them, and tell them to go to court and get it because they most likely can't because they aren't carrying anyone elses oil for profit as a common carrier.
Thank you. This is one of those situations where mineral and surface are owned by the same. They can start on surface work because of the mineral lease.
On the gas pipeline, another issue arose. Pipeline company came and asked for an easement, wouldn't give them one until Surface Agreement was in place. Operator then had pipeline put in and assigned to the pipeline company.
Now they are anxious to get Surface Agreement because no easement to electrical coop who will not put anything in unless they (not operator) get an easement from the landowner.
Ok sounds like the electrical easement is a nail to hang your hat on. It's the thing you have that they want. It sounds like they already have the pipeline in and that is too bad, I would have done my utmost to stop that until you had an agreement in place. You may need to consult with someone, a good attorney who will work FOR you. It's even possible you could have them tear the pipeline out because they had no easement, no court order and no nothing. That would be pretty massive leverage. You can't just go onto someones property and lay a pipeline, you have to have the right/permission to do so or it is trespass. You need a lawyer. If I may say so, it sounds like you are being passive. Where is that getting you? It sounds to me like they are rolling right over you. If you have a lawyer and they are not helping you any more than it sounds like to date, I recommend you get a different lawyer because if you never stop them, never demand and force them to reckon with you, why should they ever pay you anything at all? Believe me, the same question has already crossed their minds. I wish you the best.
AB, I respect you. I believe that you are one of many kind and generous Americans that may not be as common as there used to be but there are still many of, but this is business. The operator does not respect you and will abuse your good nature, to their profit. The oil company is a money generating machine that you can't make friends with. All they care about is the money. They will not like you any better for not kicking up a fuss than they would if you did. They already have virtually everything they want. When they have absolutely everything they want, you would probably have to sue them because you have nothing left to bargain with.
The absolute most certain way, in my opinion, is to find yourself having to sue is to let things go on as they are and you probably would not profit from a lawsuit.
Wow. This post was a year ago today and I have stumbled on it as I research surface agreements and water ... I am very curious to know what has been the outcome of this ...
Just this week we were "forced" to rush a surface agreement, as the company we are involved with "threatened" filing a petition under the Surface Agreement Act. Our attorney advised us to go ahead and reach an agreement. But it was all rushed, and we are having a last minute problem with the water use ...
In Oklahoma the oil company can file a petition under the Surface Agreement Act and "IMMEDIATELY" after they file that petition to make the surface owner come to an agreement -- They can begin building their site. Our attorney said they were being "jackasses" to throw the petition out there, but rather than let that happen and drag things out we should try to reach an agreement. So we did. And we emailed a signed copy, but have yet sent the original.
And as I was headed to the mail with the original I noticed the wording in the water portion of the agreement was NOT what we asked for. So ... I'm not mailing the original until we get it worked out ...
I'm wondering if the petition was filed by the company you were dealing with. Would love to know how it was all resolved ....