A: Operators are first required to send a letter by compliant mail, in which they announce their intention to drill and inform the surface owner of the proposed well location, and the approximate date of drilling will begin. Within five days of delivery, the operator must conduct negotiations in good faith with the surface owner. If the parties agree to damages, a written contract is executed, damages and drilling can begin. A: If negotiations in good faith do not result in an executed compensation contract, the operator must ask the court for the appointment of experts. An operator can then enter the property and start working. Although drilling can be started, the surface damage investigation remains before the courts. The three appraisers (one of each party, who elect a third party) will inspect the property and submit a report to the court that will assess the damage to the surface. Once the report is filed, you can accept the proposed amount or the challenge in court. Before you apply for a judicial review, you should inquire about the costs. Oil and gas developers are required to pay the landowners for: the shortfall or expenses resulting from their inability to devote land or for drilling prohibiting access to land for existing use; The market value of crops destroyed, damaged or prevented from marketing; Damage to the water supply The cost of repairing personal property and depreciation after the completion of the superficial disturbances. To be compensated, the surface owner must inform the oil and gas producer of the damage within 3 years of the injury. The person seeking compensation can take legal action or seek that the award be determined by binding arbitration.
Request an operational meeting. Upstream, it is a good idea to meet with the mineral tenant and have a meeting to discuss operational issues. These are things like access to the door, closed doors, work schedules, etc. Some oil and gas companies believe that surface use agreements benefit both parties and are happy to negotiate with the surface owner to avoid confrontations in the future. Setting up a meeting will allow the surface owner to determine the tenant`s willingness to cooperate. At least a surface owner can get maps and details on the extent of future operations on his land. Beware of a quid pro quo opportunity. Often, the mineral tenant requires the surface owner to do something that is not allowed in the rental agreement. For example, the oil and gas company may try to facilitate pipelines or facilitate the route through the property in order to obtain another leasing package. This is the ideal time to find a possible agreement on the use of the surface and look for favorable conditions. We have extensive experience in assisting our clients in SUA negotiations, including negotiating conditions related to the following situations: – Be aware of old abandoned equipment or potential contamination problems. If this type of problem exists, it could be a starting point for a debate on the need to protect the use of the surface.