When a company approaches you to request drilling into your land for minerals, many landowners will jump at the chance to make some extra money through an oil and gas lease. Unfortunately, failing to read the fine print can sometimes lead to trouble.
Depending on where you live, ownership rights can be severed, which means that surface rights and mineral rights may be segregated. Some states where mineral rights may be severed from surface rights include New Mexico, Colorado, Texas, Louisiana and other states where oil and gas production is common.
For example, one person who owns the surface and mineral rights of their property, may sell the surface rights to another. When this happens, the mineral rights owner is the person an oil and gas company will approach to sign an oil and gas lease. However, this does not mean that the individual who owns the surface rights does not get a say in what happens. The company will typically have to speak with the surface rights owner about surface operations on the land.
Although there has been a trend toward horizontal drilling, which reduces the amount of surface damage caused, there is still a certain amount of surface space needed for an oil and gas operator to drill a well and keep it in production.
The following are some different types of clauses that may be presented in a mineral lease:
Finally, a land reclamation should be added if one is not already in the mineral lease when it is presented. This clause will ensure that an oil and gas company will have to restore the land to its original condition to the best of their ability.
The oilfield contamination lawyers at Simien & Simien have a tremendous amount of experience in oil and gas well. We understand how important it is that landowners read their mineral leases thoroughly, as well as how tricky oil and gas companies can be.
If you believe that an oil and gas company has breached their contract or if you’re in the process of signing a mineral lease, we can help guide you through the process.