Do your seismic survey agreements call for sharing results with surface/royalty owners? Sticking point in our negotiations. Any info - suggestions welcome. Thanks.
Typically seismic survey results are highly proprietary for the Operator who contracted for this data with a seismic company. They spend of good chunk of money for this service and they also don’t want competitors to get hold of this data. While I have granted a permit with a seismic company, being unleased on some marginal properties, it is recommended to have a mineral lease in place with an Operator prior to approving a seismic permit. The rational for this is that you don’t want an Operator to be able to “peek” at your mineral property without a mineral lease and bonus payment being negotiated first. Otherwise, if the Operator does not see enough potential for drilling then they may not lease and the mineral owner loses out on the bonus payment.
Thanks, Mike. I have a mineral lease signed, bonus paid, but it called for seismic survey agreement to be negotiated later - which is right now. I want to see what they find under my surface, will sign confidentiality agreement to run with lease. Our lessee has gone in partnership with larger outfit, operator and they are bucking at sharing data, even though lease calls for logs, well data, to be shared upon commencement of, and throughout, drilling. Think I can make them share?
Mike Igau said:
Typically seismic survey results are highly proprietary for the Operator who contracted for this data with a seismic company. They spend of good chunk of money for this service and they also don’t want competitors to get hold of this data. While I have granted a permit with a seismic company, being unleased on some marginal properties, it is recommended to have a mineral lease in place with an Operator prior to approving a seismic permit. The rational for this is that you don’t want an Operator to be able to “peek” at your mineral property without a mineral lease and bonus payment being negotiated first. Otherwise, if the Operator does not see enough potential for drilling then they may not lease and the mineral owner loses out on the bonus payment.
Actually I would not want the raw data as I could not do anything with it. The geoscientists have to interpret the data to get the results. What I would be most concerned about, being a surface and mineral owner, is surface protection and agreeing to potential damages. I don’t know where you are located but seismic permits have gone up to about 30 bucks an acre in some areas of Texas. I have signed permits for 25 bucks for 3 D seismic along the Gulf Coast of Texas. If you have valuable trees or agricultural crops that could be damaged, I believe this needs to be considered for additional damages. I personally would not pursue the sharing of seismic data results as that is not customary. You want to encourage them to do the seismic and drill some wells. You can have all the data in the world and interpretations but it is drilling the well that will prove the commercial viability of the minerals beneath your land. This is just my own experience and opinion. Others may have different viewpoints.
Mr. Milburn,
How many gross/net acres do you control?
MALCOLM MILBURN said:
Thanks, Mike. I have a mineral lease signed, bonus paid, but it called for seismic survey agreement to be negotiated later - which is right now. I want to see what they find under my surface, will sign confidentiality agreement to run with lease. Our lessee has gone in partnership with larger outfit, operator and they are bucking at sharing data, even though lease calls for logs, well data, to be shared upon commencement of, and throughout, drilling. Think I can make them share?
Mike Igau said:Typically seismic survey results are highly proprietary for the Operator who contracted for this data with a seismic company. They spend of good chunk of money for this service and they also don't want competitors to get hold of this data. While I have granted a permit with a seismic company, being unleased on some marginal properties, it is recommended to have a mineral lease in place with an Operator prior to approving a seismic permit. The rational for this is that you don't want an Operator to be able to "peek" at your mineral property without a mineral lease and bonus payment being negotiated first. Otherwise, if the Operator does not see enough potential for drilling then they may not lease and the mineral owner loses out on the bonus payment.
Buddy, about 1200.
Buddy Cotten said:
Mr. Milburn,
How many gross/net acres do you control?
Best,
Buddy Cotten
Co-Director, District 3, NARO-TX
Board Member at large, NARO-TX
MALCOLM MILBURN said:Thanks, Mike. I have a mineral lease signed, bonus paid, but it called for seismic survey agreement to be negotiated later - which is right now. I want to see what they find under my surface, will sign confidentiality agreement to run with lease. Our lessee has gone in partnership with larger outfit, operator and they are bucking at sharing data, even though lease calls for logs, well data, to be shared upon commencement of, and throughout, drilling. Think I can make them share?
Mike Igau said:Typically seismic survey results are highly proprietary for the Operator who contracted for this data with a seismic company. They spend of good chunk of money for this service and they also don't want competitors to get hold of this data. While I have granted a permit with a seismic company, being unleased on some marginal properties, it is recommended to have a mineral lease in place with an Operator prior to approving a seismic permit. The rational for this is that you don't want an Operator to be able to "peek" at your mineral property without a mineral lease and bonus payment being negotiated first. Otherwise, if the Operator does not see enough potential for drilling then they may not lease and the mineral owner loses out on the bonus payment.
Mr. Milburn,
This falls into the category that you are getting advice commensurate with what you are paying for it.
I do not feel as if your total acreage position within the shoot gives you a commanding negotiating position. Also, operators will give you "throw down" data, with missing headers, etc. Most good operators will be happy to share the results of their data, if you take the time to work with them productively -- partnering with the operator, so to speak.
We successfully negotiate for data all the time. It is an intrinsic, bargained for position without which the permit/option would not be granted. My mineral owner has access to consultants/designees to work the data.
My point, I suppose, is that the money is in the ground, not in the data. You are leased and can negotiate a seismic data license for perhaps a bit more than normal in your area. For example, if going rate is $25, negotiate $35 for a 12 month license with an option to extend for an additional 6 months for another $25 per acre.
I think where we may go in the future is a modest licensing arrangement where we retain title to the data and will enter into a royalty arrangement with a data broker when the data is finally placed on the market. I know of nobody thinking along those terms as a landowner.
MALCOLM MILBURN said:
Buddy, about 1200.
Buddy Cotten said:Mr. Milburn,
How many gross/net acres do you control? Best,
Buddy Cotten
Co-Director, District 3, NARO-TX
Board Member at large, NARO-TX
MALCOLM MILBURN said:Thanks, Mike. I have a mineral lease signed, bonus paid, but it called for seismic survey agreement to be negotiated later - which is right now. I want to see what they find under my surface, will sign confidentiality agreement to run with lease. Our lessee has gone in partnership with larger outfit, operator and they are bucking at sharing data, even though lease calls for logs, well data, to be shared upon commencement of, and throughout, drilling. Think I can make them share?
Mike Igau said:Typically seismic survey results are highly proprietary for the Operator who contracted for this data with a seismic company. They spend of good chunk of money for this service and they also don't want competitors to get hold of this data. While I have granted a permit with a seismic company, being unleased on some marginal properties, it is recommended to have a mineral lease in place with an Operator prior to approving a seismic permit. The rational for this is that you don't want an Operator to be able to "peek" at your mineral property without a mineral lease and bonus payment being negotiated first. Otherwise, if the Operator does not see enough potential for drilling then they may not lease and the mineral owner loses out on the bonus payment.
Mr. Cotten,
Thank you for your advice. It really helps to have the advice of those who have been there before. I will endeavor to create a partnership arrangement with the operator, and see if we can get a "win-win" agreement. Thanks, Malcolm
Buddy Cotten said:
Mr. Milburn,
This falls into the category that you are getting advice commensurate with what you are paying for it.
I do not feel as if your total acreage position within the shoot gives you a commanding negotiating position. Also, operators will give you "throw down" data, with missing headers, etc. Most good operators will be happy to share the results of their data, if you take the time to work with them productively -- partnering with the operator, so to speak.
We successfully negotiate for data all the time. It is an intrinsic, bargained for position without which the permit/option would not be granted. My mineral owner has access to consultants/designees to work the data.
My point, I suppose, is that the money is in the ground, not in the data. You are leased and can negotiate a seismic data license for perhaps a bit more than normal in your area. For example, if going rate is $25, negotiate $35 for a 12 month license with an option to extend for an additional 6 months for another $25 per acre.
I think where we may go in the future is a modest licensing arrangement where we retain title to the data and will enter into a royalty arrangement with a data broker when the data is finally placed on the market. I know of nobody thinking along those terms as a landowner.
Best of wishes,
Buddy Cotten
Co-Director, District 3, NARO-TX
At large Board Member, NARO-TX
MALCOLM MILBURN said:Buddy, about 1200.
Buddy Cotten said:Mr. Milburn,
How many gross/net acres do you control? Best,
Buddy Cotten
Co-Director, District 3, NARO-TX
Board Member at large, NARO-TX
MALCOLM MILBURN said:Thanks, Mike. I have a mineral lease signed, bonus paid, but it called for seismic survey agreement to be negotiated later - which is right now. I want to see what they find under my surface, will sign confidentiality agreement to run with lease. Our lessee has gone in partnership with larger outfit, operator and they are bucking at sharing data, even though lease calls for logs, well data, to be shared upon commencement of, and throughout, drilling. Think I can make them share?
Mike Igau said:Typically seismic survey results are highly proprietary for the Operator who contracted for this data with a seismic company. They spend of good chunk of money for this service and they also don't want competitors to get hold of this data. While I have granted a permit with a seismic company, being unleased on some marginal properties, it is recommended to have a mineral lease in place with an Operator prior to approving a seismic permit. The rational for this is that you don't want an Operator to be able to "peek" at your mineral property without a mineral lease and bonus payment being negotiated first. Otherwise, if the Operator does not see enough potential for drilling then they may not lease and the mineral owner loses out on the bonus payment.
Does the land owner have access to the seismic data under his land?
Buddy,
I would think these rates paid per acre you and others are quoting are for the surface owner only? I had never had a seismic company contact me regarding a mineral permit for permission until today. I would not have thought they need permission of the mineral owner. Is this something they pay the mineral owner also for or just surface owner? Do they need only one of or part of an undivided interest owner to sign or give permission?
I'm with you, the money is in the ground, just curious though.
Joe, is it possible that the surface owner refused the seismic people and they have to get permission of the dominant mineral estates owner so they legally wrangle a way to gain acess ?
Mineral Joe said:
Buddy,
I would think these rates paid per acre you and others are quoting are for the surface owner only? I had never had a seismic company contact me regarding a mineral permit for permission until today. I would not have thought they need permission of the mineral owner. Is this something they pay the mineral owner also for or just surface owner? Do they need only one of or part of an undivided interest owner to sign or give permission?
I'm with you, the money is in the ground, just curious though.
That makes sense r w, never thought of that. The surface owner doesn't own any mineral interest so I could see him refuse. They made no offer to pay me anything they just said it was urgent as activity has commenced, that surface permits have been obtained from selective surface owners and that mineral owners can look forward to possible oil & gas leases along with possible production. Makes it sound like you just have to sign it and get it to them yesterday to win the lottery.