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Permalink Reply by Kathleen on November 27, 2012 at 1:25pm

I'm curious about Saskatchewan. Is drilling new up there? I've worked with farmers selling PMU foals and would love to see these people getting extra money. How does it work for the Canadian landowner? Do you get upfront lease money like we did if not HBP, as an example. Am I right that Canadians own their minerals?

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Permalink Reply by Lane Story on November 28, 2012 at 6:52am

Thanks for the Responses,

Mineral Rights In Saskatchewan

"Approximately 62.4 million acres in the surveyed area are under the jurisdiction of Saskatchewan. Today these provincially held mineral rights are administered by Saskatchewan Energy and Mines. The remaining mineral rights, 17.2 million acres, are held by individuals, companies and corporations.

This private ownership is termed freehold. Fractionally, four-fifths of Saskatchewan's surveyed area is held by the Crown under the jurisdiction of the provincial government and one-fifth is freehold."

http://www.er.gov.sk.ca/Default.aspx?DN=2a243e34-77a2-46b6-a1a7-e68...

Our farm which has oil wells and pipelines does not have title to the mineral rights, the minerals are owned by the Crown and leased to the Oil and Gas Companies for exploration.  In short we do not receive payment for the minerals only surface land compensation for the well site, access road and pipeline.

The compensation is negotiated by the Oil and Gas Company or Land Agents and is to follow the Saskatchewan Surface Rights Act.

http://www.qp.gov.sk.ca/documents/English/Statutes/Statutes/S65.pdf

Drilling is not new in Saskatchewan, our farm land has co-existed with Oil and Gas since the late 1970's early 1980's.  The original wells were vertical wells 700 to 800 meters or 2400 to 2500 ft in depth, producing a high quality light oil.  These previously exploited oil reserves are now being re drilled using horizontal drilling and multi stage fracking. 

 

 

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Permalink Reply by Kathleen on November 29, 2012 at 12:45pm

What about the rest of Canada, does each area have their own freeholds, federal crown ownership, etc.. rules or did they all follow suit in the 1800's? See I read the article :0).
As someone who doesn't own how did they handle the surface agreements with your land? Did the government make sure certain measure were met or was it up to the landowner to get it all done on their own.
Here in ohio there is no standard lease to protect the uneducated lessee. Of course we have environmental laws but not laws guiding the owner.
Okay I'm wrong there is a set royalty of 12.5 net that the oil and gas co. as to offer. It's up to the owner to try and get more plus other protections they feel concerned about.
Here the surface owner if they have a newer lease should be getting 20-25 thousand USD per pad. There are some leases that call for less and other much older ones where it seems questionable if they would get anything. The older leases are for the older vertical oil wells and time will tell if the oil co. will do the right thing and compensate the landowner for the disturbance. I bet we start seeing lawsuits if they don't since no one would have predicted such a large foot print to drill when they signed those leases in the 50's-80's and on.

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Permalink Reply by Lane Story on November 29, 2012 at 2:53pm

The other Provinces would have differing percentages of Freehold to Crown (Province/ State) or Federal Government.  I would assume it would depend on when the land was settled 1800's, 1900's and land was settled in Canada earliest on the Eastern portions of the Country to the Western.

There are differing regulations for Surface Compensation and environmental (Land) protection dependent on the Province.  For example, Alberta has different Surface Compensation Acts (Laws) and environmental planning and final reclamation criteria than Saskatchewan and Manitoba.  From my experience Alberta although not perfect has some the highest regulatory standards in North America.  Probably not what the general population in North America would think with the negative publicity from the Oil Sands (Tar Sands).  With that said Alberta's Regulations and Acts or Laws are not perfect and do not always protect the Surface Land Owner.

Surface Land owners in Canada can protect their rights (property) by having their own surface lease (not the Oil and Gas Companies) with an addendum outlining the conditions of the lease.  These conditions would include a Pre-Disturbance Environmental Report, constructions conditions (soil handling, washing of equipment) drilling and completion conditions, operational conditions, and final reclamation conditions over and above the Provincial Regulations or Acts.  Majority of Surface Land Owners don't, the ones that do generally have had problems with Oil and Gas Exploration Companies or Pipeline Transmission Companies for a long time or are in pockets when Land Owner Groups have organized Compensation and Environmental Protection Conditions for the area. 

Many Land Owners would like to think they are superior negotiators, the sad reality is it is like feeding sheep to wolves or Oil and Gas shooting fish in a barrel.

This is an excellent read and would apply to any where in North America

http://www.environmentalsociety.ca/main/wp-content/uploads/2012/08/...

Surface Compensation in Saskatchewan is based on;

Land Value - Current Fair Market Value of the Land 

Loss Of Use - Loss of Agricultural Crops within the area leased.

Adverse Affect - Cost to farm around the lease.

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/ofa11972

Nuisance and Inconvenience - Compensation for dust, traffic, noise, esthetics.

Severance - Compensation for severing a portion of a field.

I think it would not be fair to try and set a per pad value from Canada to the USA for the following factors;

Land Values in the States for agricultural are significantly higher.

Loss of Use, what each area grows and the net loss (opportunity cost) for the loss of the agricultural acres to Industrial.  An example of this would be the net return of a corn or soy crop in the States to crops we grow.

The physical size of the lease and the number of wells per lease.

Saskatchewan doesn't keep a data base.

Alberta has some examples,

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/ofa11701

British Columbia examples,

http://www.farmersadvocate.ca/leases_sales/surface_leases/

Other Land Owners Resources Include;

http://www1.agric.gov.ab.ca/$department/deptdocs.nsf/all/ofa11058

 

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