Well Location Fee

What is a reasonable amount to ask for if a drilling company wishes to locate their drilling site on your surface land? Should the amount they are diminishing the value of the surface be a factor? What other considerations should there be?

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Permalink Reply by Jon on September 19, 2018 at 11:13am

$30,000

Permalink Reply by Jed Clampett on September 24, 2018 at 2:42am

Don't take a 1 time payment, it should be a annual (5 or 10 year) lease, with payments to renew each term, including increases tied to inflation, tax increases or other economic indicators.  Look at it almost like you are renting them a house or cropland - you would not accept a single one time payment from your renter so they could use the house/land forever and the rent would not stay the same for 50 or 100+ years.

Permalink Reply by Dan on September 20, 2018 at 2:06am

You also have to consider if they put it near your house, what could it diminish your home value.  Noise and light.

Permalink Reply by Tusc-county-man on September 20, 2018 at 5:55am

ask for footprint restrictions

Permalink Reply by Finnbear on September 22, 2018 at 3:52pm

As with anything real-estate related -  location, location, location is what must be considered. You have to consider the location of the land with respect to the base land value (what is land worth in that area), the location of the land with respect to the oil and gas play (how good are the wells in that area), the location of the well site in relation to other features on that parcel (is it near anything that might be devalued such as a home site, is it going to occupy crop land or forest land and eliminate or affect some other current and future income production on the parcel).

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