Non surface lease

I've heard of non-surface leases and also called non-foreign pipelines (only that which belongs to your actual property). Does anyone have any info on this?

Views: 1263

▶ Reply to This

Replies to This Discussion

Permalink Reply by Finnbear on December 1, 2011 at 8:50am

You are talking about two different things.

A non-surface activity lease is just that, a lease that restricts the oil and gas co. to non-surface activity only. Typically this allows them to horizontally drill under you but must put the well pad on an adjacent property.

Many leases also contain language concerning pipelines that specifies "no foreign gas". This allows the producer to put pipe in/on the ground to transport gas out of your well and go to the sales line. It does not allow them to construct a pipeline on your land to transport gas from other wells (foreign gas) not in your drilling unit. You want this in your lease so that if they need a pipeline right-of-way, they need to negotiate a separate agreement (from the oil and gas lease) with the landowners and pay accordingly.

Permalink Reply by Tinamarie S on December 1, 2011 at 9:06am

Is there a copy of such an animal?  We orginially were presented with a non-surface(drilling) lease however when the landman came back to us with changes we requested, our lease was a drilling lease.   Lazy or entrapment?   After meeting the landman, I want to say lazy but I could be wrong.  

Permalink Reply by Finnbear on December 1, 2011 at 10:02am

It is usually just a clause put into the addendum list that says there will be no surface activity on the lease premises.

Permalink Reply by Jim Litwinowicz on December 1, 2011 at 10:17am

Companies hate to give such a clause to people because once one landowner gets it, all will want it. Soon, they would have no land to drill on.

Usually, the only ones that get such a clause are schools, parks, and industrial/commercial sites that utilize all the surface. Sometimes, the last people to sign in a unit or people with small parcels will get one because they have no plans to drill there anyway.

Permalink Reply by Finnbear on December 1, 2011 at 1:30pm
They are also used in more densely populated areas where the oil and gas co needs a number of smaller parcels (homesites) to fully develop a drilling unit. They will offer no surface activity leases to entice smaller acreage owners to lease without fear of losing a substantial percentage of their land to a well pad. Also, when the owner of a larger parcel insists on a no surface activity lease, they usually accept less in terms of signing bonus due to the restriction placed on the oil and gas co.
Permalink Reply by jett on December 1, 2011 at 10:55am

Thanks, all! I appreciate the helpful info.

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service