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Oil/Gas/subsurface easement valuation for trespass

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Question
Negotiate or sue a drilling company in Utah for subsurface trespass?
A drilling company (company A) has drilled a well to our south, resulting in a subsurface trespass 300' in and out of our property at 9000' deep.  They claim the pipe is sealed, and that it was the only path they could take to get where they wanted.  My mineral rights are leased to another company (company B), who were notified in Jan. of 2014 and gave permission, reasoning that our minerals were protected (therefore they are not going to help us fight company B).  Company B, notified us in April 2014 and now wants to compensate us a one time $500 to establish and easement.  I believe I'm being blatantly low-balled and taken advantage of.  
Is it unreasonable to ask for an annual sum, and if so, how is one to know what a going rate is?  Do I need a lawyer?  Any lawyer will cost triple + what they've offered just to negotiate/re-word a contract.  What's a rancher to do?

Answer
If the pipe is sealed they are not trespassing assuming the oil and gas regulatory body for Utah gave them permission to drill through your minerals on their way to a producing zone that is not part of your minerals. You could probably pull up their drilling permit online to verify this.

Not sure why they are wanting to "compensate" you though. Would seem to me like they don't need to. I would certainly be careful about accepting/signing any "compensation" paperwork, and yes, would seek the advice of an oil and gas attorney prior to doing so.

If you do nothing, and it's later found that they are in fact producing your minerals then you would probably have a case for trespass. I would think the other company you did lease to would also be concerned if in fact Company A started producing your minerals out from under you.

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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