As a novice I have a couple of questions:
If the operator has a mineral lease in effect with the owner of the surface and mineral rights --
1. Will they contact the surface owner prior to seeking a drilling permit or do they just show up one day?
2. Will they negotiate placement of roads, well, and etc. with the surface owner?
3. If so how early do they usually contact the surface owner prior to drilling or seeking a permit?
XTO has a lease with us and our neighbors (605 ac. total, Trinity Co., TX) that is due to expire in about 8 months. They have 3 wells permitted within about 3 miles of us now. I am trying to guess what plans if any they have for us.
Vernon:
In the cases that I have been involved with, the operator and surface owner agree in writing the terms for drilling and completing a well such as surface damages, water use, etc. This agreement makes mention of road building, fence and entry to well site, etc. The contact time prior to drilling will most likey vary but this matter could also be addressed in the agreement between the surface owner and the drilling operator. One area which needs to be addressed by each surface owner, is the depth of pipelines. I have worked several oil spills or pipeline leaks which results from disking a field whereas the equipment punctures the pipeline causing a leak. If the pipeline is buried too shallow, over time erosion occurs leaving the pipeline closer to the surface. Make a list of all matters that could occur as a result of a well including tank battery equipment and specify in detail in the agreement.
In my experience, they will contact you prior to the drill permit application. They will likely let you know that a survey crew will be out to stake a location. You may only have a day or two notice that this is going to happen. In our cases, they have staked a location then talked to us about the roads, gates, fences, water well, etc, all within a couple of days.
They have always negotiated the placement of roads, but the drill site is somewhat fixed. If there is a serious conflict with surface features it likely would be relocated.
Your lease may be the deciding factor on what they do.
Thanks for all the good advice. I also own 47 ac. between this tract and the highway which is not leased. They would have to negotiate a seperate ROW if they went through that, right?
Vernon:
You might want to check with a legal advisor on that question. I would think some sort of written agreement would be applicable but don't know how the law reads in regards to property easement.
Vernon said:
Thanks for all the good advice. I also own 47 ac. between this tract and the highway which is not leased. They would have to negotiate a seperate ROW if they went through that, right?
Dear Vernon,
Since your lands are in Texas, I can address your issues. First, by a fairly recent State Law (as memory serves), the operator must contact you in writing prior to drilling or plugging operations.
If you are the owner of both the surface and minerals, the ideal time to address surface use is at the time of lease execution. In the more typical forms, the lessee is bound to pay for growing crops and timber, but nothing else. Under common law (Texas) the Lessee is not even obligated to do that. If that part was overlooked, then you must try to negotiate a Surface Use Agreement to arrange for damages, etc. The oil company wants to keep a good relationship with the mineral and surface owner.
When I did contract work for XTO, we did the surface negotiation about 45 days prior to spud. Spud dates are set by the rig schedule.
My lease was negotiated by the previous owner we purchased from. Fortunately he added several addendums to the lease including a Pugh clause and another that addressed the operations including construction and maintenance of fences and cattle guards, damages to fences, roads, culverts, timber, crops and other improvements. Pipelines are to be buried "below plow depth". Apparently he had an attorney draw up the addendums so hopefully I will be covered.
You will find XTO easy to deal with. They are a class act. Their land manager and I were classmates at UT together and he moved to XTO from Exxon, then Exxon bought the company. He just cannot escape Exxon, I guess.
I can guarantee you this. He understands that our business is one of relationships and he will want his people to establish a good, fair relationship with you, while at the same time, giving them the latitude to conduct operations.
He is a just, honorable man. If you have any problems with XTO, let me know and I will give my friend of over 35 years a call to let him know the field personnel are not doing their job.
Vernon said:
My lease was negotiated by the previous owner we purchased from. Fortunately he added several addendums to the lease including a Pugh clause and another that addressed the operations including construction and maintenance of fences and cattle guards, damages to fences, roads, culverts, timber, crops and other improvements. Pipelines are to be buried "below plow depth". Apparently he had an attorney draw up the addendums so hopefully I will be covered.
Thank you for that insight. I'll keep your offer in mind. Hopefully I won't have to take you up on it.
Buddy Cotten said:
If you have any problems with XTO, let me know and I will give my friend of over 35 years a call to let him know the field personnel are not doing their job.
Best,
Buddy Cotten
Mineral Manager
Vernon, I keep asking that same question. Does the operator have any rights on adjoining land that is not under his oil and gas lease, ie: separate tracts of land that have not been put under any oil and gas lease.
Vernon said:
Thanks for all the good advice. I also own 47 ac. between this tract and the highway which is not leased. They would have to negotiate a seperate ROW if they went through that, right?