Surface Vs Mineral Rights

[Brute 23]

Let this be a lesson to any one thinking of purchasing land in the future... ;-)

You can not stop drilling if you only own the surface next to getting a restraining order against the oil company, and good luck with that. :D

My advice is to keep in touch with the mineral owner under your property. They can get you more than fair market value and put in no drilling clauses for certain areas and all kinds of other stuff (cattle guards, roads, compensation for trees, ect..). They are the only one who can truely protect you.

We go to the surface owners and talk with them before we do a lease to work things out in the best interest of both parties.

Brahma Bull your opion is largely scewed. Mineral owners do pay taxes, so do the oil companys. ALot of towns have survived only because oil and gas. Go to a town with alot of production and look at their schools... ;-) Poor roads is your Commisioners' fault, no one elses. Alot of times the oil companys even chip in to fix county roads. Its all a matter of how the county wants to deal with it. YOu can fight it all you want, but the rail road is still coming through. :) "YOu can't stop progress.."- :cowboy:

We also own land in Lavaco county between Halletsville and Victoria, I feel your pain. :tiphat:

I just heard the county commisioner for this district got the boot.So maybe things will change.Mismanagement of funds and corruption,under the table are only a few words I been hearing about the whole bunch running this county.Think one of the oil company reps was at a county meeting ask where all the money went for CR 14 and Ezzell school.The officials were squirming in their seats on that question.Just also heard from 2 law enforcement friends the reason they moved from this county.Yeah I know you can not stop the railroad,can't fight city hall,ain't going to win against the oil companies.Ain't going to stop all the oilfield traffic on this county road.It's fact of life living down oilfield gravel roads.Well it will cost them plenty to drill on my land,cut any of my trees or make an eye sore.Maybe if Bush had his ranch next door the county road would have been paved long time ago.

:lol2: Yup, state what you want for your land and stick to it. If you can hold out, and they punch wells all around you. Do you know what your land becomes worth? ;-) Get on the Rail Road Commisions web site and look for who has permits in your area. You can market your land to the oil companies also. It is a two way deal. :tiphat:

 

[skyline]

And where I live, the surface damages are not near enough to offset all the impacts to the remainder of the property (especially if you own smaller tracts). It's a one time check to the property owner. Once you've spent it, it's gone, but the well is on your property in the middle of your business forever. Surface owners that don't own the minerals don't get royalties.

When its all said and done you might have a 1 acre gravel pad with a couple pipes sticking out of the ground.
Not sure what they are paying there, but here they pay way more for "renting" that one acre than you could ever make off it running cattle or any thing else for that matter. NOt to mention a good road, cattle guard, water well... ALot of times you can get extra roads graveled

Not totally sure about this, need to check, but I believe some of our leases have $1200/ acres/ year for every acre of land. That money goes to the surface owner. That includes gravel roads, locations, and any thing else they might have on your property. If the want to run a pipe line you could be talking several hundred dollars an acre for them to run a piece of pipe.

Caustic, did they really drill a well 100yds behind that house or re-enter and old well. You can't drill with in X-amount of feet from a house. There is a law for that.

Again, it's a matter of perspective. I think there are a lot of variations in practice between the different production fields in Texas right now.

I own minerals in two locations (one is under production) and I have property where I just own the surface with no minerals. If a person owns 500 acres and plans to run cattle on it for the rest of their lives, heck, they can drill all over that place. But if someone owns a smaller tract, say 10 to 100 acres, and that tract is in a development corridor and has real development potential, the payments that I have seen for surface damages do not account for the impact against future development. And a cattle guard, 50 feet of new fence on either side, and a gravel road is not going to offset that damage.

The leases around here go to the mineral owners as do the royalties. The lease payment is a lump sum and royalties are paid monthly based upon production and price. The surface owner gets a single payment for surface damages, which is typically the value of the property that is disturbed, with very little, if any consideration of damages to the remainder. With all that said, if they want to drill on your property, and if you don't own the mineral rights, you are pretty much out of luck in Texas.

I still think you're better off hiring a good oil and gas attorney that knows what the law says to help you negotiate, especially if you've never messed with landmen before. I'm just saying that this is not the Beverly Hillbillies - strike oil and move to Hollywood. This is real life and sometimes it stinks here in Texas for the surface owner without minerals.

 

[hurleyjd]

Okay you either have minerals or you do not. If you have them then you are in the drivers seat. If you do not then you are screwed. If you only have the surface then they will pay damages. The mineral holder has the right of egress and engress to get to what they want. Pipelines for the wells will also be in the lease agreement with the mineral holder. Now I am not an oil man but have had the experiance with it on my property where I did not own the minerals. Try the shotgun route and you will be looking out of the jail while they are doing the drilling.

 

[Caustic Burno]

There is just a ton of misinformation out there about the gas wells, and you get a different set of answers depending on who you ask. The wells can last two years or they can last twenty. They sure are building up the area with motels and such for the workers like it's gonna last a long time. It will be interesting to see what will happen if the boom goes bust early. Everyone in Johnson County is planning on having this kind of business for thirty years.

None here as I am looking at one out the front window and one out the back window.

There are only two views, the "informed" and the "un-informed". ;-) Educate yourself and you can find the advantages real quick. Oil companys are more than willing to pay for what they want, you just have to go about it the right way to get it out of them (that may mean not signing the first lease they bring you :roll: ).

There is no need to feel bad about having minerals under some one elses property. One of my grandfathers bought and sold land like baseballs cards. He did keep minerals. At the time minerals were not worth much, surface is what people wanted to grow crops and livesock. Times have changed... can't dwell on the past.

I am very well informed on the subject as I own mineral rights on 640 acres that I don't own the surface.
And I own surface that I don't own minerals on and there are wells on both. I have been to the Rodeo and have the T-shirt. All they have to pay the surface owner is fair market value of three independent appraisers.

 

[backhoeboogie]

You can market your land to the oil companies also. It is a two way deal. :tiphat:

Sort of Brute. I have a piece I haven't leased yet. I own only half the minerals and it is a small piece (16 acres). That gives me 8 acres net which should earn something between $3200 and $7000 a month depending on how well they frac and if they don't over frac.

The problems is, the gas company is trying to low ball me on the lease. I haven't leased. All I ask in the going rate for this area. They won't pay it so I won't sign. They love to play hardball with people needing income. They keep upping the chum money but they won't up the royalty.

So now they have half and it is in their best interest to lease mine or else their half is no good. Most of the others don't want to sign me for only half.

Every piece is a different situation. Each person is in a different financial situation. Each gas company operates a little different.

 

[TexasBred]

Okay you either have minerals or you do not. If you have them then you are in the drivers seat. If you do not then you are screwed. If you only have the surface then they will pay damages. The mineral holder has the right of egress and engress to get to what they want. Pipelines for the wells will also be in the lease agreement with the mineral holder. Now I am not an oil man but have had the experiance with it on my property where I did not own the minerals. Try the shotgun route and you will be looking out of the jail while they are doing the drilling.

Hurley you're right. The O&G company does have to pay the surface owner damages but as CB said the amount is "to be determined". A recent situation in Johnson County, Texas court ruled the oil company only had to pay the surface owner $5,000 and this was for a pad sight and everything. (Normal going rate right now is $50,000 just for the pad sight) However, any easements for pipeline will be negotiated between the surface owner and pipeline company and all monies go to the surface owner not the mineral owner. It's considered surface damages and the surface owner is the one giving the easement.

 

[Brute 23]

You can market your land to the oil companies also. It is a two way deal. :tiphat:

Sort of Brute. I have a piece I haven't leased yet. I own only half the minerals and it is a small piece (16 acres). That gives me 8 acres net which should earn something between $3200 and $7000 a month depending on how well they frac and if they don't over frac.

The problems is, the gas company is trying to low ball me on the lease. I haven't leased. All I ask in the going rate for this area. They won't pay it so I won't sign. They love to play hardball with people needing income. They keep upping the chum money but they won't up the royalty.

So now they have half and it is in their best interest to lease mine or else their half is no good. Most of the others don't want to sign me for only half.

Every piece is a different situation. Each person is in a different financial situation. Each gas company operates a little different.

Yes, you are right. YOu have to be be prepared when you play hard ball. You may have to pass on several leases before signing. :) There is always an exception, you have nothing to lose by marketing I think we all can agree. ;-)

IF some thing is there they will want it eventually no matter the cost. There will be companies coming in trying to test the area out, then you will have some that are just flat out low-ballers, but when the big dogs come in after the area is proven they will pay. YOu see this right now alot because of all the oil companys that have popped up. IF you can hold out and work them, it will pay. IF one company wanted it then most likely there will be another.

Our leases allow no pooling. THe company has to take all our acreage and only ours, no 750ac units with 10 different property owners. Only time we allow pooling is for directional drilling on a small place and they can never add more than what we own, meaning we never have less then half the unit.

With 16 acres they can suck it out from under you and you won't even know it. :D

 

[backhoeboogie]

These aren't pools. This is shale. High pressure gas encased in rock.

They have just learned how to get it. They are getting about 30% is all. It is new technology and new patents are going out constantly on equipment being used. Ten years from now they will probably figure out how to get another 30% - maybe more. The only true angle drilling is from the surface down to the bed, then they go horizontal through the formation. The angle drilling allows them to get three horizontals off of one pad.

 

[Brute 23]

Pools are just the amount of acreage the oil company takes in.

Didn't know we were only discussing surface rights for people in the B-Shale, my appalogies :tiphat: . Was just throwing tips for general oil gas leases. Give people some thing to think about. :?

 

[backhoeboogie]

Pools are just the amount of acreage the oil company takes in.

I understand that part totally.

The Godley discussion (Johnson County) and Lammie's discussions were pertaining to Barnett Shale.

I have studied and learned quite a bit over the past 5 years. I have learned enough to know that I don't know diddly. :lol:

 

[TexasBred]

Backhoe... most of my learning started about 5 minutes after I signed the lease. :cry2: :cry2:

 

[backhoeboogie]

Backhoe... most of my learning started about 5 minutes after I signed the lease. :cry2: :cry2:

I know folks (even some family) who went out to eat with the land man, and signed the leases. That was the first meeting and first ever look at the lease.

 

[Lammie]

Backhoe... most of my learning started about 5 minutes after I signed the lease. :cry2: :cry2:

I think that is the case for most folks. We were smart enough to sit back and wait on the lease until the price went up signigicantly before we signed. That took about a year. I believe they are preparing to start production as we speak, making roads and such. Not on our place, but about a quarter mile up the road. It is the well on our "pool" though. The next several months should be interesting.

 

[TexasBred]

Lammie we leased in '99 I think it was. Nobody had ever heard of the Barnett Shale. Got $10 an acre bonus money and 1/8 royalty....it was like a gift from heaven. (at the time). Could lease for a three quarter million in bonus money alone today and get double the royalty. Oh well hind sight is 20-20 and nobody forced us to sign the lease. :roll: :cry2: :cry2: :cry2: :roll:

 

[skyline]

Backhoe... most of my learning started about 5 minutes after I signed the lease. :cry2: :cry2:

I know folks (even some family) who went out to eat with the land man, and signed the leases. That was the first meeting and first ever look at the lease.

I had one of those meals once upon a time. Turns out that was the most expensive meal I have ever eaten. I'm still paying for it. But that's a whole 'nother story about this lovely oil and gas industry.

 

[Brute 23]

Pools are just the amount of acreage the oil company takes in.

I understand that part totally.

The Godley discussion (Johnson County) and Lammie's discussions were pertaining to Barnett Shale.

I have studied and learned quite a bit over the past 5 years. I have learned enough to know that I don't know diddly. :lol:

Yes Sir, and you also know it is always changing. :D

Just to clarify myself,
Pooling is getting acreage together to make a Unit. They don't call it a "pool", its a unit. First step to trying to understand some thing is the know the vocabulary, it helps. :)

 

[Texas PaPaw]

Backhoe... most of my learning started about 5 minutes after I signed the lease. :cry2: :cry2:

I know folks (even some family) who went out to eat with the land man, and signed the leases. That was the first meeting and first ever look at the lease.

Got lots of neighbor's that fell all over themselves to sign those cheap "rape & plunder" leases a couple of years ago. Best advice I heard was "Don't sign a lease until you can see a drilling rig from your place". Have talked to folks in the Cleburne area who wish they had waited as the later leases in their area were a lot better than the first. Still waiting but have 2 rigs drilling about 3 miles away and a pipeline is headed our direction.

 

[backhoeboogie]

Pools are just the amount of acreage the oil company takes in.

I understand that part totally.

The Godley discussion (Johnson County) and Lammie's discussions were pertaining to Barnett Shale.

I have studied and learned quite a bit over the past 5 years. I have learned enough to know that I don't know diddly. :lol:

Yes Sir, and you also know it is always changing. :D

Just to clarify myself,
Pooling is getting acreage together to make a Unit. They don't call it a "pool", its a unit. First step to trying to understand some thing is the know the vocabulary, it helps. :)

There are the ones for drilling, and there are the ones for units which are 640 acres +/- 10%. Then there are the specially approved RRC units.

 

[Brute 23]

Yes Sir, and you also know it is always changing. :D

Just to clarify myself,
Pooling is getting acreage together to make a Unit. They don't call it a "pool", its a unit. First step to trying to understand some thing is the know the vocabulary, it helps. :)

There are the ones for drilling, and there are the ones for units which are 640 acres +/- 10%. Then there are the specially approved RRC units.

:? Is that just on the B-Shale? We have two properties that are 125ac, each one is its own unit. We allow no pooling. On the same side, we had a 496ac. place and a company only wanted 200ac to add to some other land to make a unit. We made them take the whole place and make it its own unit.

 

[TexasBred]

Brute those unit sizes apply to all drilling in Texas, however, you can limit the size of a unit via your lease agreement which it appears you have done. You can also have units larger than the 640 but everyone in the pool has to agree to the enlarged pool... aka unit.

Pawpaw, those that have held out are getting better leases, however, once a company has leased everything around you don't have much bargaining power. Other companies certainly don't want you (unless you have big acreage) and then you're almost at their mercy. They can always drill and just escrow or suspense your estimated royalty payments until such time as you do lease with them. Kinda like poker....gotta know when to hold and when to fold but seldom will you buy the pot from an oil company.