Surface Owner Payment For Oil/Gas Well Site

After drilling is complete does the oil company pay the surface owner for the surface land that will be kept for oil/gas extraction?

The oil company has taken about 2 1/2 aces of my land and about 2 acres of my neighbors land to put up storage tanks and equipment for 4 wells that were drilled.

Is this something I should negotiate for or do they pay the going rate based off the county appraisal value?

When should I expect payment or do I have to hound them for payment?

Good luck! My experience is that, "if it ain't in the original lease language" it isn't likely that you or your neighbor will ever get anything.

Too late!

Sorry! They won't give you anything except a mess and hard times. No $$$ either.


Hi Paul!

Damage Settlements are normally negotiated prior to the company entering onto the land. If the company never contacted you or your neighbor, however, then they may have (probably have) left themselves open to legal action.

I suggest you and your neighbor give the company a call. Ask to speak to the Landman responsible for your area and well(s) and explain the situation to them. He or she will probably be quite willing to come to a generous agreement with you, as they sure as hell won't want to be responsible for a lawsuit being brought against their employer.

Better yet, have an experienced Oil and Gas Attorney contact the company and assist you in negotiating a settlement.

And just so you will know, Damage Settlements for Drill Site damages are one thing. Damage Settlements for the long term loss of the use of your lands (Production and Storage Areas) are based upon what you were using it for before they showed up. Lands under cultivation, lands in Timber, Grazing lands, whatever, all have different "loss" values. If the land is in a Subdivision, for example, you can demand that they pay you the retail value of the lot.

There are other issues to consider, such as the location of their facilities, location and maintenance of any roadways they use or build, fencing, gates, your and your neighbor's access and use of their roads, etc. For example, if they dug a Mud Pit, you can ask them to leave it when they leave: Free Cow Tank. If they drilled a Water Well, you can negotiate for them to leave the casing in the ground when they leave: Free Water Well.

Much of all of this should have been negotiated at the Leasing stage, but they will probably be happy to come to some sort of settlement with you.

I don't know where your lands are located, but see if the attached helps at all.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

110-Rate_Damage_Schedule.pdf (181 KB)

If you own both surface and minerals, then you may have to look at your oil and gas lease regarding damage payments. Many leases exclude any surface damages for mineral owners. Be sure in any oil and gas lease to negotiate the surface damages and how they will be calculated - including well pad, pipelines, electric lines, etc. If you own only the surface, then you are not bound by the terms of the oil and gas lease. The oil company is entitled to reasonable use of the surface (what is reasonable is debatable), but must pay damages to the surface owner.

An other reason to have your contract crafted by an able gas and oil lawyer.

Completely agree. Always well spent money.

I want to thank everyone that replied. Very good information. I had to go back and read my Lease, Bigfoot and Ms. Malone got it right, language is not in the lease. Guess no $$$ for the land being taken/used for storage tanks. Mr. Tooke the damage clause is in my lease and I will surly contact the oil company as they took my only entrance to my property and did not provide another entrance for me, they id make a nice entrance for my neighbor. Just to let everyone know I own 21 acres of the 640 acres pooled but only own 25% of the mineral rights of the 21 acres, there are a total of 15 Lessor/properties that got pooled in.

Should have gotten an oil/gas lawyer

Paul -

They can't "take" your entrance to your property, even if you did not have any provisions in your lease regarding that issue.

They can, perhaps, if it is rural farm or ranch property, "share" different locks on the gate to your entrance, but they cannot "take" your rightful, legal or even just Time Honored entrance to your property.

Ask your neighbor for a copy of their lease (most companies today only file for public record a Memorandum, which doesn't include all the terms of a lease). That way, you can see what terms regarding the issue(s) your neighbors had in their lease before you contact the company.

If the company built a separate entrance for your neighbor, that would have been under a provision in their lease. I've seen that sort of thing in leases I have negotiated with Cattle Ranches. But nobody on God's Green Earth can cut you off from your own property.

It may be worth your while to write the land department (before you hire an O&G) attorney to see if they would be willing to afford you the same considerations that they afforded your neighbor. I would like to think that they would endeavor to establish "good terms" with the surface owners. But who knows what they think. Some of these companies are willing to please and other don't give hoot.

Be prepared to give them your legal description.

Good luck,


Again, my experience in situations like this is that the oil company will not literally "take" the existing entrance; but, they will just use your entrance and screw up the road surface and then you have to put up with all the mess that goes with that including 24 hour a day truck and equipment traffic, gates being left open, etc. Generally speaking, these guys are interested in one thing and that is getting their job done for the least cost and least headache to them, so contacting or having an attorney contact them might help. Situations like this definitely brings out the importance of all the Lease provisions and all the hard work and headache that goes into that document. Don't be shy or in a hurry to sign!