Expert: Frederick M. - 6/8/2009

Question
We have a 60 acre farm in Fayette Co, PA on which there was a well drilled by Amoco in the early 70's.  A very large setup compared to the wells being drilled at this time.  The permit states that it was drilled to 8800 feet while wells today are drilled to about 3500'in my area (to my knowledge). This well had about 1200 lb pressure when first drilled but now barely moves the needle.  (I used to read the meters for them).  We do not own the oil/gas rights and don't know who does, only surface.  We have been contacted by a landman from Land Resources out of Blairsville that want to do a 3D seismic survey on 25 square miles of which my property is a part.  Consists of drilling several holes for charges and laying out sensors to recieve the data.  They claim they are acting as agents for a number of leaseholders who have combined resources to make this exploration more affordable.  Do we have to let them enter?  What are our options?  If they are agents for the leaseholder, why do they need our signature?  Also, if further drilling ensues, what type of damages can I pursue?  I've heard that comp for transmission lines are based on the diameter of the pipe.  Can you refer me to a good resource for this information?

Answer
Dave, in Oklahoma at least (where I live) though seismographic operations may aggravate the surface owner and cause occasional damage to the surface, they are considered to be a reasonable exercise of the mineral owner's easement.

The mineral estate in most jurisdictions (if not all) is the "dominant" estate, and therefore gives the mineral owner the "right" to use as much of the surface as is reasonably necessary to "enjoy" his minerals. This usually will include seismic operations as well. Extensive damages caused by seismic (there is usually not much damage, if any) would probably be collectible from the company. Most companies will offer to pay the landowners anywhere from $5 to $50 per acre anyway for the "inconvenience" of their operations.

If they end up drilling a well on your land, you will be compensated for any damages caused by their activity. This would be covered under your state's "surface accommodation" laws most likely. Drill site payments can range from one-time payments of $5000 to $25,000 for each location. Usually companies will consult with the landowner in detail prior to setting up a drilling location.

Compensation for pipeline across your land is usually paid on a length basis, rather than a diameter basis I think, though I could be wrong on that. It may be both. Pipeline easements are not in my area of expertise really, as I am not a landowner for all intents and purposes.

Hope this helps you out.
Frederick M. Scott