Did you sign away your Surface Rights?
You’ve signed your oil and gas lease, and the company has paid you your bonus money. Great! All that’s left to do is sit back and wait for the company to drill so you can start receiving royalties, right? For most, it is. For you, however, it is not. Years later, a landman for the oil and gas company comes knocking on your door asking you to sign a surface use agreement allowing them to construct a well pad on your farm. When you say “no way,” he says you gave them the right to do so when you signed your lease and they’ll do it with or without your cooperation.
Is this true? What should you do? Is this more than you bargained for?
Unfortunately, many people don’t know the full extent of the rights they grant when signing an oil and gas lease. Perhaps the most important of these rights is the right to use the surface of their property for oil and gas development. Often times, it’s not always apparent. A recent lease I ran across—which is typical of most leases—reads as follows:
Lessor does hereby LEASE, GRANT and DEMISE exclusively unto Lessee…the right of ingress, egress, and regress over, under, and through the Leased Premises, and together with the exclusive right to conduct such operations on the Leased Premises as may be necessary for incidental to or convenient for Lessee, at Lessee’s election, to explore for, develop, produce, measure and market oil, gas or other related substances covered hereby, using methods and techniques which are not restricted to current technology, including, but not limited to, geophysical operations, the drilling (either vertically, horizontally, or directionally)…of wells…and the construction and use of roads, production flowlines, gathering lines, pipelines and/or gas transmission lines, tanks, water wells, disposal wells, injection wells, pits, water or other impoundments, electric and/or telephone lines, solar facilities…. (emphasis supplied)
Let’s unpack this a little bit to see exactly what we’re getting into with this lease:
- “the right of ingress, egress, and regress over, under, and through the Leased Premises”: in essence, this means that the oil and gas company will have the right to travel across your property.
- “the drilling (either vertically, horizontally, or directionally)…of wells”: the oil and gas company has the right to construct a well pad on your property.
- “construction and use of roads, production flowlines, gathering lines, pipelines and/or gas transmission lines”:the oil and gas company can construct roads on your property for their own use and install any number of pipelines of any size on your property.
Importantly, some of these rights don’t necessarily have to be tied to the development of the oil and gas underlying your property. So beware! When you sign the typical oil and gas lease, you’re bargaining for much, much more than simply your oil and gas minerals. The landman who is knocking at your door and sitting at your kitchen table has one goal, to obtain your signature. He works for the oil and gas company, and does not have your best interest in mind (read my blog. “Knock, Knock, It’s The Landman”). Anyone considering signing an oil and gas lease should contact our office for a free consultation when they first get that knock at the door.
But what do you do if you already signed an oil and gas lease with surface rights and now the landman is knocking again? It all depends on the specific wording of your lease and what the oil and gas company is seeking. No matter the situation though, your signature on their documents is still valuable, and you should be compensated accordingly without giving up any further rights.
If you have been contacted by an oil and gas company who is seeking to use your property for oil and gas development, call GKT today at (304) 845-9750 to set up a no-cost, no-obligation consultation to determine your rights and options.
Reader note: Gold, Khourey & Turak is the Ohio Valley’s leading law firm representing land and mineral owners throughout West Virginia, Ohio, and Pennsylvania in all oil and gas related matters. You can trust us to provide you with peace of mind knowing that your property and family legacy are secure for the future. When you need to be heard, make sure the most experienced law firm is speaking for you. Let GKT be your voice.