Location of new well site

General Mineral Rights Discussion
1

My husband and I own 950 acres in Oklahoma. Heavy drilling has been going on in our area for a few years now, and several gas companies have placed new wells on our property (about four over the past two years). We are currently negotiating the purchase of 160 adjoining acres and plan to build a new house on it in the next few years. However, this morning my husband discovered that a gas company is negotiating a new triple well site on the new 160 right next to the location where we would like to build (on a hill with a magnificent view). I have advised my husband to seek completion of our purchase so we can help determine the location of the new well site.

If we are able to gain ownership soon, how much input can we have about where the well site will be located? We own no minerals, nor will we own the minerals on the new property. Also, my husband has accepted that the gas companies can pretty much drill when and where they choose. Is this truly the case? What rights do we have as surface owners… two other wells on our 950 will be going in as of this morning. This is getting to be a lot…

2

I would agree with the assessment that they can pretty much drill when and where they choose. Colorado has a surface owner bill of rights that provides a minimal amount of protection for us. Supposedly it is a big boon for us to have that, but I can tell you it’s nothing spectacular. Even if you have something similar, I don’t think you can choose where the well goes, however you can require that it be in a reasonable location. The other problem is that you are buying the property knowing that they want to put the wells in a certain place. If your house was there first, and then they started scoping around wanting to put the oil wells in that location, that would be a different story. You already have wells all over your property. How much say did you have in the location of those? Go to the Oklahoma Statutes, and see what you find under the chapter natural resources.

3

Thanks, Lisa. The other wells have been located in areas far from our house and on rocky slopes that were not prime ranch/farm ground. This is the first that it has been a concern, although I guess we knew it could happen at any time. It sounds like the seller is going to work with us to close the transaction as quickly as possible so that at least we might have some negotiating power. I will see what I can find in the Statutes. I appreciate your help!

4

So I took a quick peek at the statutes. It sounds like you do have some advantages, like having a contract before they can enter, and having to agree on damages. If you can’t come to an agreement, then it will be decided by a third party (O & G commission I think it was). So, a lot probably depends on the slant of that third party. Chances are, they are pro oil company. I did see the following:

§52-320.1. Restriction on location of habitable structures.

A. After the effective date of this act, it shall be unlawful to locate any habitable structure within:

  1. A radius of one hundred twenty-five (125) feet from the wellbore of an active well; or

  2. A radius of fifty (50) feet from the center of any surface equipment or other equipment necessary for the operation of an active well, including, but not limited to, hydrocarbon and brine storage vessels, tanks, compressors, heaters, separators, dehydrators, or any other related equipment.

B. Provided, however, the provisions of this section shall not prohibit an operator and surface owner from agreeing in writing to setback provisions with distances different from those set forth in this section.

[1] Added by Laws 2003, c. 361, § 1, eff. July 1, 2003. Renumbered from § 318.10 of this title by Laws 2006, c. 309, § 1, emerg eff. June 8, 2006.

That tells me that is what the third party would deem reasonable. So, if the proposed drill area is more than 150 feet away from your proposed building site, I think you’d lose that argument. If you look closer, maybe you’ll find something that I didn’t see.

Lisa said:

I would agree with the assessment that they can pretty much drill when and where they choose. Colorado has a surface owner bill of rights that provides a minimal amount of protection for us. Supposedly it is a big boon for us to have that, but I can tell you it’s nothing spectacular. Even if you have something similar, I don’t think you can choose where the wells goes, however you can require that it be in a reasonable location. The other problem is that you are buying the property knowing that they want to put the wells in a certain place. If your house was there first, and then they started scoping around wanting to put the oil wells in that location, that would be a different story. You already have wells all over your property. How much say did you have in the location of those? Go to the Oklahoma Statutes, and see what you find under the chapter natural resources.

5

Nanette Schmitt said:

We crossed each other. That is good news that they drilled in less desirable areas. It sounds like they are reasonable company to deal with. Perhaps the area they are scoping out isn’t particularly important to them. Have you thought about contacting them before closing? If they are dead set on drilling right there, perhaps you’d want to rethink the deal. If the current location isn’t particularly important to them, perhaps they’d be more inclined to change it before they spend any more time or resources on the current prospective location.

Thanks, Lisa. The other wells have been located in areas far from our house and on rocky slopes that were not prime ranch/farm ground. This is the first that it has been a concern, although I guess we knew it could happen at any time. It sounds like the seller is going to work with us to close the transaction as quickly as possible so that at least we might have some negotiating power. I will see what I can find in the Statutes. I appreciate your help!

6

My husband is working on that right now. We went to scope out the area just a few hours ago and would like to suggest another possibility. From my husband’s understanding, the company was working on the assumption that the current house on that property (close to where we want to build, but not identical location) was going to be bulldozed. That was the original plan of the present owner since the house is no longer habitable as is. However, the presence of that house gives us a bit of negotiating power once we own the property, I think. We’re a little bit afraid that it may actually push the well site closer to where we want to build. But, we own the property just across the “road” from where they plan to drill. If we could get them to move to that side, it would be just that much further from the new house site. It is a little better farm ground, though, so it is a toss-up. The good bottom-ground on this property, though, will probably make the purchase worth it (in terms of ranch profit) regardless of where the well goes in. I just have my heart set on the new house site…

7

Okay, ignore what I said about the third party being the O&G Commission.

If a surface land owner refuses to permit a lessee or mineral rights owner access to the land to mine or drill, the lessee or owner can petition the district court in the county in which the drilling will occur. The petition is for appraisers to make recommendations of the damages that the land owner will incur. Once the petition has been filed, the lessee or owner can enter the property to begin mining or drilling for minerals. The court will decide within 30 days after the appraisal is complete on the total compensation ordered. Either party may appeal the judge’s decision by requesting a jury trial within 60 days.

Read more: What Are Surface Rights of a Land Owner in Oklahoma? | eHow.com

Lisa said:

So I took a quick peek at the statutes. It sounds like you do have some advantages, like having a contract before they can enter, and having to agree on damages. If you can’t come to an agreement, then it will be decided by a third party (O & G commission I think it was). So, a lot probably depends on the slant of that third party. Chances are, they are pro oil company. I did see the following:

§52-320.1. Restriction on location of habitable structures.

A. After the effective date of this act, it shall be unlawful to locate any habitable structure within:

  1. A radius of one hundred twenty-five (125) feet from the wellbore of an active well; or

  2. A radius of fifty (50) feet from the center of any surface equipment or other equipment necessary for the operation of an active well, including, but not limited to, hydrocarbon and brine storage vessels, tanks, compressors, heaters, separators, dehydrators, or any other related equipment.

B. Provided, however, the provisions of this section shall not prohibit an operator and surface owner from agreeing in writing to setback provisions with distances different from those set forth in this section.

[1] Added by Laws 2003, c. 361, § 1, eff. July 1, 2003. Renumbered from § 318.10 of this title by Laws 2006, c. 309, § 1, emerg eff. June 8, 2006.

That tells me that is what the third party would deem reasonable. So, if the proposed drill area is more than 150 feet away from your proposed building site, I think you’d lose that argument. If you look closer, maybe you’ll find something that I didn’t see.

Lisa said:

I would agree with the assessment that they can pretty much drill when and where they choose. Colorado has a surface owner bill of rights that provides a minimal amount of protection for us. Supposedly it is a big boon for us to have that, but I can tell you it’s nothing spectacular. Even if you have something similar, I don’t think you can choose where the wells goes, however you can require that it be in a reasonable location. The other problem is that you are buying the property knowing that they want to put the wells in a certain place. If your house was there first, and then they started scoping around wanting to put the oil wells in that location, that would be a different story. You already have wells all over your property. How much say did you have in the location of those? Go to the Oklahoma Statutes, and see what you find under the chapter natural resources.

8

Thanks also for looking up the statutes for me. I do appreciate the help. I will pass that information along to my husband… at least it is an encouragement that we do have some negotiating power. Thanks again!