Seismic Testing

Evening, my grandmother just called us. She is 92 ..She is retaining the mineral rights to the property we own . She has just rec'd a certified letter to do Seismic Testing on our property. I've done tons of reading here, and am so thankful for this site. Grandma needs money plain and simple however she does not want the property destroyed nor do we. We plan on building there in the spring. They only offered her $5 pr. acre. Am I to understand the following to be true..

 

The property is located on the Nauvoo Rd, Morris Twp..There is a well located on the road behind her , the same road Three Springs is on is within eyesight.

 

WE are all trying to help Grandma make the best decision that benefits her now and us later? Make sense?

 

A. Does this effect  her current lease which expires in Jan 2011.

 

B. Does this mean the possiblity of a well?

 

C. Am  I right in concluding their is property damage after Seismic Testing .

 

D. Are they doing this to get in under her current lease which the snowballed her into signing for little dollars!! Which expires in Jan 2011

 

E. Should we as "locals" keep an eye on this property more than we do? Do to the possiblity of seismic testing.

 

F. Can she renew her current gas lease with another company ? WITH A much better offer?

 

G. If she is contacted is it possible so are the neighboring properties?

 

H. Can she always refuse Seismic Testing without effecting royalites from exsisting neighboring wells.

 

J. Is the Seismic Testing a part of the 640 acre tract she might be in under her old lease expiring in Jan 2011.

 

K. Can Grandma sign a NO WELL lease but still benefit from royalites of another well , if of course she is in a tract.

 

K. Am I asking to many questions? :0)

 

 

I am reading Seismic Testing companies are paid by the gas companies to help them locate gas  pockets? My terminolgy may not be correct but I think you will get the general drift of my questions .

 

Thank You , your help is appreciated. RobinSJ

 

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Replies to This Discussion

Permalink Reply by G S Gass on November 19, 2010 at 3:12pm
Robin,
Good questions - bottom line is the existing lease granted the rights to conduct geophysical surveys (Seismic surveys). I recommend that you advise the seismic survey company of the concerns you have for any wells/springs/etc which may be adversely affected and request the seismic company to offset by 500 feet. Ask for notification in advance of entering the property and have someone available to monitor surface activity. You may claim damages under the terms of the lease or the terms of the seismic consent letter - it the consent provides for damage payment in addition to the $5/acre seismic consent consideration.
Best regards,
GG CPL/ESA
Permalink Reply by Robin Jackson on November 19, 2010 at 4:06pm
Oh dear do you mean that her lease that is about to expire will allow this to happen? I'm so sad about this.

Can she ask for more than $5 an acre? I need to get a copy of her lease, she is 92 and this is of utmost importance.

Thank You
Permalink Reply by Robin Jackson on November 19, 2010 at 4:12pm
If we could convince her to transfer the mineral rights into our names asap would that change the fact that we own it and also own the mineral rights? Would that void the contract?
Permalink Reply by Ann Ticopa on November 19, 2010 at 6:09pm
No, it wouldn't void the current lease. Anyway, unless you pay the fair market value for her mineral rights, it would probably not be in the best interest of someone her age to transfer them to you. The reason being the Medicaid qualification penalty for transferring assets at less than fmv. Iirc, the look-back is up to 5 years. Hopefully she won't ever have to go into a nursing home, but you can't be sure.
Permalink Reply by Robin Jackson on November 21, 2010 at 11:52am
Evening, I have the lease.. :0) I don't believe I'm to ignorant to what it implying, but I do want to post a clause here. I will leave out names and such.

My Grandmother doesn't have the money to pay a lawyer, either do we.

Tomorrow as instructed by Grandma I will call the Seismic Co..that contacted her and see if they are through the "lease" people. The Lease People are Jim Bourbeau Land Service LLC, I did find the part Ann mentioned and she has agreed to any testing on the property..What does that mean for the surface owners? Do we have any control because her lease seems pretty onesided..I feel she was completely taken advantage of during tough times.
Permalink Reply by Ann Ticopa on November 21, 2010 at 2:13pm
Bourbeau is printed on the first page of the lease as the Lessee? (I ask because they're one of the companies that the gas companies contract with to obtain leases, rights-of-way, etc. Usually the lease will be in the name of the gas company they are working for.)
Permalink Reply by Robin Jackson on November 21, 2010 at 2:18pm
Yes it is Ann.
Permalink Reply by Robin Jackson on November 21, 2010 at 3:55pm
He is a broker isn't he? I wonder what company it is? It isn't stated anywhere?
Permalink Reply by Ann Ticopa on November 21, 2010 at 4:29pm
Permalink Reply by Ann Ticopa on November 19, 2010 at 4:57pm
First thing to do is check her current lease. The leases I've seen have a clause that gives the gasco the exclusive right to do seismic testing. (It may be referred to as "geophysical" rather than "seismic".) So if the letter is from the company that holds the lease - and the lease has that clause - they already have the right to do the seismic testing. But if that's the case, why are they offering $5/acre?

Sometimes seismic testing companies will test an area on their own so they can sell the results to gascos. $5/acre is a commonly offered price. However, if the current lease does have the "exclusive right" clause, the right to allow seismic testing (or not) belongs to the lease holder.

So, (1) check the current lease, (2) determine if the seismic testing has been authorized by the lease holder, and (3) carefully read any release she would have to sign to get the payment.
Permalink Reply by Robin Jackson on November 21, 2010 at 3:58pm
It is on her current lease that Seismic testing/geophysical testing is exclusive to the leesse holder. She is going to ignore the recent letter from CGG Veritas to do Seismic Testing.
Permalink Reply by Brian V. on November 19, 2010 at 5:47pm
A few thoughts. If $$ is being offered it is my opinion that the testing is being done by a company without the consent of the lease holder. If the company that currently holds the lease wanted to do testing most likely they would have the right to do so built into the lease your Grandma signed. If the lease holder is doing the seismic ( or contracted it to be done) testing they could enforce the clause in the lease to get it done without consent. They often try to avoid having to do this though. You really need to check the current lease. Not just for geophysical wording but also to ensure there is no extension clause if it was signed in 2006. Many of the 2006 leases have extension clauses that the mineral owners were not aware of.

As to the testing. We have had it done on our land. The crews are on and off generally very quickly. They do cut paths through brush to get equipment in and what not but IMO nothing that I didn't mind. Speak with them to get a clear picture of their plans on your land and let them know your concerns. Set up clear guidelines for being on your land and give a clear description of areas of concern. They will work with you. If you can have them give you 24 hour notice before they enter. The testing isn't really that bad. Also, to an extent the testing helps ensure quality drilling with better results down the road if it gets to that point. If you own enough land and don't allow testing then there will be a void in their results which could work against you down the road.

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