We have been asked by a well know oil co. to sign a "Geophysical Permit And Exploration Easement Agreement" this will be done prior to or back to back w/ their leasing our mineral rights in MT. They have permission or an agreement w/the surface owner (we were told) and need a mineral owner to sign off to allow access to the land and this type of testing. My questions are:
Should I confirm w/ surface owners? Most of all some of the wording gives me pause.
" Grantor does hereby grant...permission to conduct a 3D geophysical survey, and or/a salt water disposal feasibility survey, which may include geological, geophysical, geochemical, seismic surveying, surface survey or any combination thereof... other mineral exploration and to conduct a salt water disposal feasibility...by lands that are owned by Grantor...."
What is "salt water disposal" ? Could my mineral area & surface owners land be used to dispose of salt water a-crewed from an adjoining well? Thus our lease would not be intended to produce oil just hold waste? Is this type of permit w/ lease common? How is compensation handled? I know so little, maybe these studies are done at each Sec. or part and I have never been involved. thanks for any insight.
Louise:
A salt water disposal well is a well used for disposal of saltwater into an underground formation. These type wells are common in all areas where oil production is present. In some States, the disposal well and the seismic tests are handled between the oil operator and the surface owner. The surface owner recieves any compensation for the disposal services and not the mineral owner. I would welcome seismic testing from the standpoint that this could prove to be beneficial to your leasing the minerals. The compensation for the mineral owner would be the sale of gas or crude from a well.
Thank you that makes sense. My concern is I am the mineral owner. the oil co states that they need a mineral owner to sign off to get the permit since the surface owner has no mineral interests. Could the area containing my mineral acres be used to dispose of waste from an adjacent field and not be intended to be part of a productive oil cash flow for us? Regardless, would it be wise to connect w/ the surface owner and make sure they have a working agreement and won't come after me for damages?
Louise:
There should be an agreement between the surface owner and this operator in regards to surface damages, etc. which would be resulting from this salt water disposal well. If this well is going to be utilized as a "commercial disposal well", then the well could be used by various operators transporting salt water from area leases. You might want to discuss this matter with the surface owner and make sure that he is aware exactly how this well will be set up. Is your mineral rights currently leased? I had a similiar situation several years ago where I was the mineral owner only and the seismic company contacted me in regards to seismic testing. I later learned that since I had the minerals leased, the company would deal with the lessee instead of myself. This scenerio could depend on the State where your minerals are located.
Louise Tario said:
Thank you that makes sense. My concern is I am the mineral owner. the oil co states that they need a mineral owner to sign off to get the permit since the surface owner has no mineral interests. Could the area containing my mineral acres be used to dispose of waste from an adjacent field and not be intended to be part of a productive oil cash flow for us? Regardless, would it be wise to connect w/ the surface owner and make sure they have a working agreement and won't come after me for damages?