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Oil/Gas/Surface Use Payment for Drilling a Well

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Question
Hello Mr. Scott,
I have land in Union Township 18 North 6 West in Kingfisher County, A well is to be drilled this Sept. I do not know what to get for the price of the land surface as they say it will take 3 to 5 Acres. What should I expect to be paid for lost of use of my land.
Thank You,
Russell Burton

Answer
If the well is actually drilled ON your land, and you are the surface owner, then I would try to negotiate anywhere between a $5000 and a $15,000 one-time payment to cover any damages to crops, timber etc. Note that they are not required to pay you anything really (though that's open to debate) so be nice when negotiating.

Just as important as the payment (in my opinion) would be drafting an agreement (or having your attorney do it) having to do with other items affecting the land. For instance, many landowners would prefer they line any "mud pits" with plastic so as to avoid contaminating groundwater, while others would ask that any water wells they drill be turned over to the landowner when they are finished with them. Still others who have water on their land will offer to sell it to the oil company for $.15/gallon or something as a convenience. You could also cover any damage to timber, fences, roads, etc. in your agreement.

Most oil companies want to get along with their landowners as well as their mineral owners so it's unlikely they will "rape" the land just to drill a well. In fact they actually have the RIGHT to use a reasonable amount of your land to produce the oil and gas underneath since the mineral estate is the "dominant" estate (i.e. you can't keep the mineral owners from their oil and gas.) That said the use must be "reasonable" and in fact most companies will contact you prior to drilling a well in order to "work something out" as to any damage their operations might cause but if they don't then you should contact them prior to commencement of operations.

Any oil and gas attorney could draft a fairly good "land use" agreement for you, or you can look online for some clauses you might want to include in one you draft yourself. Of course if you are the mineral owner as well as the landowner then you could incorporate a land use "rider" into the oil and gas lease.

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