Seismic Survey Payment

recently got a letter from a company called TGS wanting to do seismic surveys on our leased property. Anyone had experience with this and any pros/cons? They offered us $5 per acre which sounded really low but I have no idea. Any input would be greatly appreciated.

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Permalink Reply by LAND ONE on March 12, 2015 at 3:52am

Where is the property located?

Permalink Reply by John on March 12, 2015 at 4:09am

carroll county. The letter states this survey is being done in Belmont, carroll, Guernsy, Harrison, Jefferson, noble, and Tuscarawas counties.

Permalink Reply by paul geiger on March 12, 2015 at 5:22am

That's the going price in Guernsey  County . That what we were paid last year .

Permalink Reply by John on March 12, 2015 at 5:26am

thanks Paul. Did you try to negotiate that price at all or did you just take their original offer?  Did you use an attorney to craft a new agreement to make sure no loopholes etc etc, or did you  just use their standard version?

Permalink Reply by Ben on March 12, 2015 at 5:45am

I had seismic testing completed on property in PA last year. I held out 6 months. There is little to no room for negotiation. However, I refused to sign the contract as it was. They added an addendum that stated any property damage would be the responsibility of the (seismic testing company).

I felt it was important to allow them to do the testing, but I wanted to ensure my property was not damaged. Besides survey ribbon left hanging from a few trees, there was no noticeable disturbance to my land. Based on my previous experience, I would allow them to do it again.

Permalink Reply by Gary Keeney on March 12, 2015 at 7:16am

I would agree with this, Be sure there is enough protection from damage. It is hard to get anything done after the mess is made. They made quite a mess of one hayfield of mine in wet weather and didn't think it needed anything but smoothed back out. Be sure they know where springs,drain tiles etc are located.

Permalink Reply by paul geiger on March 12, 2015 at 8:24am

I did hold off about 3- 4 weeks  no attorney .

Permalink Reply by pat on March 12, 2015 at 9:28am

Thats what we paid too. Thats the going rate but i heard they get 40,000 an acre for the testing. How true it is i dont know but i heard it on this site.

Permalink Reply by Joe Bezel on March 12, 2015 at 1:05pm

John,

Check your lease for a clause that reads something like "Lessor hereby leases exclusively to Lessee ...together with such exclusive rights as may be necessary or or convenient for Lessee, ... including the right to conduct geophysical or other exploratory tests."  A seismic survey is such a test, and you must have explicit permission from your leaseholder to allow TGS to do this, not the form letter the land agent will pull from his briefcase.  A letter from the drilling company should be addressed to you and have the detailed parcel information in the letter.  Otherwise, you have a huge liability hanging out there if they ever got really mad at you and decided to sue. From conversations I've had with people in the field, producers such as Chesapeake want these surveys to be done and will purchase the results, but don't want to officially stand behind them because they don't want the liability for any damage they may cause.  Your oil/gas lease contains language that makes the producer fix any damage their subcontractors cause, so they keep their relationship with seismic survey companies casual.

Another problem is the vagueness of TGS's contract.  The way it reads, damages are limited to the measley $5 per acre, and it is about impossible to correct with just a few addendums.  When I showed their contract to my oil/gas attorney, he told me he could fix it but it would take several pages and would cost a few hundred dollars, and he's a friend of mine.  There really is no money in this for landowners.  I told TGS that they would have to accept my attorney's changes and would have to pick up his bill.  All I have heard since is crickets.

Permalink Reply by Josh on March 12, 2015 at 2:07pm
Josh
This is what I suggest. Tell them to keep the $5 and that you want 20% royalty for whatever they sell the info for. They are drilling holes on your land to obtain something to sell. So what is the difference and why shouldn't the landowner make a percentage of the profit that wouldn't exist without him?
Permalink Reply by bessieblues on March 12, 2015 at 3:11pm

As far as holding the seismic testing company responsible for damages,GOOD LUCK!  They wont be in business long after the testing is completed. Doesn't anybody remember Global? Soon after Global completed the seismic testing in Harrison county they filed for bankruptcy. It is all planned in advance to avoid liability issues. Landowners beware!

Permalink Reply by Craig Cooper on March 13, 2015 at 6:48am

bessieblues, 

Global is the exception here so it is unfair to disparage all other acquisition companies based on them.

John / Josh, your lease agreement(s) will determine what is & isn't possible. One primary determinant is whether you are mineral owners or not.

I am a retired geophysicist (Amoco, BP) with a fair amount of experience associated with seismic data acquisition, processing & interpretation. I have no vested interest in any of the shale plays so am happy to provide information, answer general questions about the 'seismic process' and give an opinion about an issue.

For the sake of full disclosure, however, please be aware that I am a director on the board of Dawson Geophysical so will not / cannot discuss specifics or competitive information.

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