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Oil/Gas/50% Surface and Executive Rights

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Question
I asked a question last week about surface rights in regards to a purchase of property. We continued to push the Seller to convey a percentage of the mineral right but they will not budge.

However, as part of the agreement the Seller has stated that they will convey the 50% of surface rights and 50% of executive rights. Our main interest with the mineral rights is not to receive payments but to have the ability to protect our investment of the surface. Not to deny anyone access to the mineral, but to have a say in how it is done and include conditions in the contract (i.e reimbursement terms of damages)to restore the surface in a way. As you stated have the 50% surface doesn't provide us any real protection as the oil company could approach the remaining 50% share to contract a lease.  

With ownership of 50% on both of these right what protection do we have for the surface of the property? For example, On such a small property will a company attempt to negotiate a lease without involving us in which we would be able to negotiate clauses to protect the surface. (i.e. surface damage reimbursement).

Or is there still a lot of exposure?

Answer
If they conveyed 50% of their "executive rights" in the mineral rights to you as part of the deal, then that would give you the ability to negotiate an oil and gas lease on 50% of the mineral rights, but would not entitle you to any royalty. In other words, you'd be leasing their half of their minerals for them basically.

While this would not give you total control over the land, it would certainly give you a good bit since the company will want to negotiate with you to get that oil and gas lease; more so than they would need to with if you only owned the surface without the right to lease. This is a good thing, because in the oil and gas lease you can negotiate any issues you may have with land use and make it part of the oil and gas lease. This will give you the "say" you are hoping for, much more than not having any executive rights (the right to lease) would.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub  

Oil/Gas

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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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