Mr. Cotten- My parents have 60 acres in Sullivan Cty PA and have signed a seismic permit request, only to regret it very quickly. They have not signed a gas lease at this point and are not sure they will be doing so. What will happen if they inform the company-Geokinetics, that they no longer agree to the testing? Will the company sue them, even though there is no actual loss to the company of time, expense, at this point? They said the agent lead them to believe the agreement was not legally binding since it did not require notarization…Would an alternative be some sort of addendum addressing notice of start time, repair of surface damage, etc? Any advice re how to proceed would be greatly appreciated!
Buddy Cotten said:
Dear Ms. Hicks,
One of the more important issues revolves around how many mineral acres do you own and are they full or partial interest? If you own no mineral acres and surface only, then you may have little recourse if the seismic company has any mineral interest under your surface permitted or leased. The mineral estate, being the dominant estate in Texas, will be able to conduct its operations on the surface without your consent.
For an example, if you only own a portion of the minerals, the seismic company needs only permit (or lease) another undivided mineral interest owner and your mineral estate will be evaluated, without a lease from you, without your permit, without a payment of any type being made to you.
If your land were under an oil and gas lease, the company would not be coming to you for a geophysical mineral permit. The “typical” oil and gas lease in Texas provides that you grant broad exploration rights, including the right and privilege to shoot seismic. Only the most sophisticated landowners can command an oil and gas lease that retains that right to the mineral owner.
On another example, if you own a full mineral interest in only 40 acres, the seismic company can shoot around you and infer the geology under your land. Many seismic operators have no problem with leaving out a 40 acre tract. They will stack shot points on the property line and get the data anyway. By the way, seismic vibrations on your property have been held in Texas courts to NOT be trespass. Only physical trespass counts.
With a little more information shared by you as to the type of ownership you enjoy and its magnitude, you might well receive different recommendations.
I will many times take a contrarian view of geophysical exploration as it relates to landowners hopes and desires. Some pundits will say to never grant a permit, only a lease. If that were the case, and all landowners followed that mantra, then a 3-D shoot would never occur. The expense of LEASING a 250 sq mile 3D shoot is just prohibitive.
I always suggest to my clients that the benefit is in encouraging exploration, since the real money and benefit lies in production – not in a seismic permit, not in a bonus payment, but the exploitation of mineral assets.
Best,
Buddy Cotten
www.cottenoilproperties.com