sorry folks for yet another thread on the topic but can't seem to find what I've seen before with the search feature and now I've gotten a request letter in front of me.
It's my 1st time through this process and remember reading that there are important considerations. As example one condition in this letter is that the original offer constitutes settlement in full for all damages. Another is it doesn't seem to have an end date but does say the agreement shall survive any lease, sale, trade, etc...
I've got no clue what 3-D surveying entails, or what normal wear and tear to the property would mean.
I'm unsure of any leverages I may have or risks in excersising those leverages. I know my area has some nicely producing new wells nearby but some a little further away are a little better, and some not as good. Theres a drought there and water is in short supply right now and there's been some news about not enough electricity access in parts of the area. This is 80 acres in Pawnee county Oklahoma T-22N R-04E. My 80 is the only private owned land in the section, the rest is state 'school' land. Also, I've been letting family use this property for cattle and storing hay for slightly more than the cost of property taxes - without a written lease.
I'm wanting to do this right and get a fair rate per acre, which is now offered at $10. All assistance will be greatly appreciated.
My thought is to make sure it's worth your time to enter a contract. If you only have 10 acres, don't enter a contract for $100. Settlement in full for all damages, no matter what they do? Just say no. Is there a clause that holds you harmless, even if someone is bitten by a dog on your premises? No end date, never ends, seems pretty simple, and wrong. Just say no. Does the contract grant exclusive rights to do the seismic survey? How much money is this contract worth? How much is it going to cost to have your lawyer look at the contract. How much money will be left after your lawyer looks at the contract. They had a lawyer draw up the contract, don't enter the contract without a lawyer of your own. The seismic company intends to make money off shooting your acres, alot more than $10 an acre, what's in it for you besides risk?
That said, Buddy Cotten has a blog on geophysical survey and it's abuses, I recommend it. Find blogs near the top of this page. If your property isn't a full section I doubt you would keep the oil companies from getting the information they need. If the property is just scrub and in your eyes it could not be damaged, you still need a clause that says the seismic people enter at their own risk and hold you harmless.
Thanx R W. I've added a little info to the post that your response pointed out and brought to mind as important to consider. Being unsure of proper etiquette I've not posted the 10 conditions from the letter for brevity's sake, but in reading over them again I see the damages portion continued on past what I had absorbed from it before - to say 'shall further compensate for all damages above and beyond normal wear and tear...'. I'll be glad to post the conditions if wanted.
I appreciate the reply, discussion is already helping me read this offer better.
I think that you being held harmless is the most important thing.
Second is that it be worth your while, if there isn't enough upside for you, there is not a good enough reason to grant acess.
Even if they say they will pay for out of the ordinary damages, you could well have to sue them to make them make good. You could be tens of thousands of dollars out of pocket before they agree to do what they should have done in the first place. I rrealize that things don't always go wrong but if they do, I hope people will have covered themselves against that eventuality.
Remember, this company wants to make money off your acres. Many times the company that contracts for the seismic actually subs out the work to someone else, if there is that much money to be made in it, I think they can pay more than $10 per acre and if it isn't enough money to cover MY legal fees with something left over for me, why on earth would it be a good idea?
Unless your property is large I doubt that you will be knocking yourself out of the running for a well because they will get a peek at your geology if they shoot around you.
Contractor agrees to indemnify and hold Grantor harmless from any personal injury or property damage claims that may result from Contractor's operations on the above described porperty (ies).
another condition that stands out now says if they don't conduct geophysical opertions on the property they 'shall not be obligated to make any payment to the Grantor'. Is that common?
oh, p.s. - thanx for pointing out Buddy's blog, i'll find it and give it a couple reads.
Larry, I think the no payment if they don't conduct the survey is common. I would want to be paid whether they do the survey or not, after all, the right to do the survey is worth something in itself or they wouldn't be offering conditional payment. The seismic company probably wants to have a large area tied up in a nice little bow before they pay anyone, so they can just walk away with a few man hours and postage to write off if they don't get enough acres to shoot. They are looking for a sure thing. Same reason for no time limit, it could take them years to put this together. The best part will be all the landowners will be tied up, committed with no payment twisting in limbo, until the company is ready to shoot. I guess you could write them a letter saying you will meet them at the gate and hand them the contract in exchange for the check.
I'm glad they are agreeing to hold you harmless.
I am sad to hear that they want your rights for nothing, which brings up something else I only touched on before. What if they turn around and sell your agreement to someone else for a profit? I mean, if you are going to give the right to survey to this company for 0$, it should at least be non-transferable. If people are going to give up their rights for free, I need to get myself to the print shop early in the morning, get set up to do metered postage, call my lawyer because I need a contract drawn up. Sounds like a great business opportunity, I can offer $10.50 per acre, but only in the event the acres are actually shot by my assignee. Another great (OPM) other peoples money business is born. And then I wake up because I won't jerk people around like that, but it's not because I couldn't ; )
I see it as two distinct issues. It wasn't too long ago I was worried about the same things you are. I'll just share my experience with you. As far as the actual performance of the seismic operations, as long as you are held harmless and have agreed to the damages compensation clause in the contract, and the seismic company was aware of refraining when the ground was too wet, keeping my gates closed, and avoiding the pecan trees in the south pasture (and such), it didn't bother me to have them on my place. It has been done three times now...each without a trace left behind. Heck, once they even laid and collected the equipment with a helicopter..as it was faster than 4 wheelers, etc. Also, I'm a better than average negotiator but was unable to negotiate a higher price than you...$10 each time.
The larger question is whether to allow them to do seismic if you do not already have an oil and gas lease in place. I think this is what RW is referring to. In my case, I had already been leased and my attitude was one of cooperation...i.e. if you need this information to jumpstart my mineral production, then go right ahead.
It seems that most folks, myself included, are unwilling to let them shoot seismic (just take a free peek under my place) without having an acceptable lease in place. If your area has some nice wells around it, I'll bet a landman will come calling soon (if you own the minerals) to lease you...If so, you will have another seismic opportunity then. If not, you are only out $800 for now. Hope this helps.
I received same request/offer. I am in sec 1 t20 R3E. (near glencoe). Our area is really getting'hot' It is likely Devon will drilla set of horizontal and the seismic info will help them plan their wells so I agreed. In fact this this the second group to ask to do a survey. Normally they are useing a truck with sensors placed around the area in a grid. The truck then either thumps the ground or sends out energy of various wavelengths that reflect back to the sensors
There should be a time frame in which the shoot is to be done, possibly one to two years. Larry has never said if the contract is for exclusive rights to shoot. I wouldn't sign an open ended contract for $0 down. If you want the shoot to happen, the shoot actually taking place should be made a condition of the agreement with damages if the shoot doesn't happen. The seismic company wants things every which way but loose, including free if they can't put the shoot together as a sure thing, and I wouldn't play that game. The seismic company intends to make money off this shoot, they can pay up front. The oil companies are going to pay the seismic company, up front, before they get to look at the data. The seismic company wants you to trust them, but they aren't going to trust the oil companies, they will want to be paid first. Like I said before, you don't have to be left out of the shoot or deny them acess to your property, just tell them you will meet them at the gate and exchange the contract for the check when they are ready to start. What could be more fair than that?
here's where I am right now. I talked with the family member I referred to above who has property in an adjoining section. She also got this same offer for hers. She works in the county courthouse and spoke with a landman about it, and he advised to amend it with notations before sending it back. Putting stars and our conditions which are '*no wet work' and '*permit expires 12/31/2013' at the bottom of the page.
I've also called our leasing operating company, Highmount - which leases both my section and the adjoining one the other family member has a part of. I left a message for a callback, to ask whether they are coordinating with this land services company sending the survey permit request. Both she and I got our lease renewal paperwork in the mail on the same day we received the survey requests.
Kirk - in noticing Devon's activities and news articles I've grown to kinda wish they had shown an interest in our area. They seem to be leading the pack on using newer technology and methods in their drilling processes. I have noticed they're pretty active in your area - grats!
This isn't a done deal yet and I'm still gonna be trying to learn all I can before it is - if for no better reason than just growing more comfortable with it all. Any input/discussion ya'll have to offer is still valued.