Might I pick the brain of our gas and oil people?

[NationalMatch]

My wife is trustee/power of attorney re some rural land in OK. She received a letter from Reach Oil and Gas in OKC. Included in the letter is a W-9 "Request for taxpayer ID number and certification."

The last paragraph of the cover letter: "..the process of permitting the subsurface minerals within the project are underway. In the state of Oklahoma, the courts have ruled that the mineral estate takes precedence over the surface estate for the purposes of oil and gas exploration. We are in hopes that you will accept this revised offer by signing and completing this surface permit and W9 and retuning them in the SASE provided, before we are required to forward this to the mineral department."

They also include a "Seismic Agreement" which specifies compensation, limits to their liability if they destroy the property (which, I might add, is pristine hunting land), and the "Section XXXX to Section XXXX specifications.

I'll call our attorney's office today but, does it appear that Reach has mineral rights? Or are they fishing for land to explore for presence of oil?

The reason I ask is because we've been contacted before, we declined, and the companies have said, "Ok, we'll take you off our list." But as of now, no company, Reach included, has ever produced/included any paperwork proving they have such rights.

 

[cowadle]

never singe a blanket agreement. although the mineral estate does trump the surface as for drilling it doesn't necessarily mean they have express rights to the surface. they are required to provide and negotiate a surface use agreement. you need to ask them to provide to you the specific demand of your surface estate to include any drilling locations pipelines roads fences anything. if they are wanting to do a seismic study of the below formations they will want to drive all over the surface with thumpers. they will leave compacted pathways and some surface damages that you will be very lightly compensated for,so consider limiting them to one entry and trip over the land and specify the times and dates they can enter. if they choose to re enter they can negotiate and pay for re entry. think of fences gates fires water wells and buildings foundations etc. limit the radius of how close to any of these they can drive or thump. ask them also to supply you with a copy of the data to your underlying formations. they can sue you and gain entry but they won't unless you refuse to negotiate. just take time and get the best agreement that limits them to their task because the money will be insignificant

 

[NationalMatch]

The trust owns several sections of land. Reach oil only specifies one of those sections.

Does it sound like they have pre-existing mineral rights? Do they not have to show proof of those rights? How can we demand that before we consider their offer/demands?

 

[Shadowrider]

Sounds like a typical seismic permit. What county is the land in?

Mineral estate is the superior estate, but they do have to compensate for surface damages and you have some say in where and how they operate. Getting an attorney who is current on O&G operations is a wise move.

Seismic operations won't bother the wildlife terribly much, they'll be back after the crews are gone, it's a bigger deal with crops.

 

[TinkerTanker]

I know nothing about O&G contracts, but I do know that if you expect this to clear you more than 40k/year do NOT fill out a W9 form yourself. Taxes will eat you up. If it won't clear that much you might just put a $100 LLC together (easy) so you don't get sued because a drill broke and ate some poor kiddo's arm.

 

[cowadle]

reach doesn't own the mineral rights probably but they represent the companies who own the leases on those rights? probably? the ownership of the mineral estate may be the trust but if the trust has leased those rights then the leaseholder can demand development under the terms of the lease. different leases have different terms so get copies of the leases of the minerals under the lands of the trust. correct about the seismic operations and the damage to surface but be aware of water wells structures etc and compaction. my advice is limit the seismic to one trip in and specify the hours of operations on the land. no blasting or fence cutting. also remember the crop damages go to the lease holder and not you so get your tenants involved to a degree.

 

[Fredkrueger100]

I think it is pure bs that a company can come into someone’s land to drill and explore for O&G. They shouldn’t have any rights to do so. And if it’s allowed by the landowner there should be major compensation for it. These companies have tons of money and only care about making more. The landowner should be able to make a lot off of it.

 

[TedKennedy]

I can tell you from personal and unfortunate experience that you will want to take pictures of your land before and after. There are a great many drillers who look for riches and will leave nothing but scars.

It can turn into a real mess.

 

[hunter966]

If you’re unsure who owns/leases the minerals you can go to the county treasurers office to look through their books to see.

And like was said a above don’t sign a blank easement, do consult a lawyer, and if you decide to sign it’s possible you can limit their area of work-don’t give them a blanket easement.

For example keep their limits to 20 acres instead of 160 acres.

Also, better make sure you put in the agreement no cutting chains, locks, fences etc. and if it rains no access till conditions are dry.

 

[16colt]

I think it is pure bs that a company can come into someone’s land to drill and explore for O&G. They shouldn’t have any rights to do so. And if it’s allowed by the landowner there should be major compensation for it. These companies have tons of money and only care about making more. The landowner should be able to make a lot off of it.

What about the mineral owner's rights?