Suggestions
- Learn about your rights as a landowner, even if you don't own the mineral rights. If an oil company is going to drill on your land and you don't own the mineral rights you still have some say in how things can be done, within reason. If you own the surface rights you will be approached with an offer of compensation for lost grazing value or crop value. Your surface rights belong to you and anything that lessens the value of your land needs to be compensated for.
- Negotiate how roads and gates will be built. You can't really stipulate what material roads are built of, except maybe with a really good lawyer, but you can stipulate on what parts of your pasture are to have gates, and what kind they are, if they will be required to be locked at all times, etc.
- You also can request that a "gate guard" is stationed at the entrance to your property from an adjacent property of road. The gate guard will be required to check people in and out and this adds a layer of security to your property while the well is being drilled. Clever ranchers have even been known to stipulate that it be a family member or themselves be paid to guard the gate. You may even negotiate at what times of the day or year work can occur, within reason if you earn income from hunting and can show that the oil company is ruining your livelihood.
- Get a water well out of the deal if possible. The drilling company will need water for drilling the well. Either they will drill a water well at the rig site or have to pipe it in. You can request that the water well they drill remain for your personal and farm use after the well is drilled. A water well can be worth as much as $10,000 in some places. You may also sell water, by the cubic foot, from a pond or lake on your property, as long as it is not shared or owned by someone else. You may be entitled to damages if fish are killed by runoff and use of water.
- Negotiate for unforeseen circumstances that may arise when leasing your land for oil and gas drilling. In the surface rights lease you can establish the value of any farm animals that are killed such as market value plus a certain percent for loss of use. You can establish clear rules about what will happen once oil production ends and how your land will be restored.
You have a number of options when it comes to leasing the surface rights to an oil company. If in doubt get a good real estate lawyer to help you draw up the contract with the oil company.
Tip
- Contact a good real estate attorney in your area.
The Executive Suite
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