Impacts to the Surface Owner who doesn't own the Mineral Rights
Right now a lot of landowners are going to make out financially on leases and royalties. Unfortunately in future the mineral rights will primarily be sold separately from the surface or the mineral rights won't sell. If the surface owner does not own the mineral rights, I see the following concerning issues:
1.) no say in the location of oil/gas well, access road, pipelines, power lines, etc.
2.) The temporary drilling pad will permanently impact the crop yields to some extent; I don't care how well they reclaim it.
3.) The area used for the permanent well site, access roads, pipelines, power lines, noise from pump jacks, etc. will impact the future potential of the property in regards to building sites, split up crop fields, etc. Basically surface area will be used for wells and access road rather than crops, timber, etc. without compensation.
4.) Potential for impacts to water supply.
5.) Will they have the right to use the water supply for drilling operations?
6.) Supposedly a producing well will impact real estate taxes for the surface owner as well as the mineral owner.
Will the surface owner have any control or compensation for any of these impacts since they are not involved in the lease negotiations or a party in the lease? I know compensation is generally in the lease for crop damage and timber but in this scenario, the owner of the surface rights will not be involved in the lease. What are other peoples thoughts on this?
Also, I saw an auction where the owner retained half of the mineral rights. Wouldn't this make it very difficult to negotiate leases in the future when two entitities have to work together to negotiate a lease? One side may not even want to lease.
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Replies to This Discussion
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Permalink Reply by laney on -
My conversations with Kenyon Energy (Chesapeake) suggest they realize they must negotiate with BOTH the mineral rights owner and the surface owner before accessing the mineral from that surface. Per verbal conversation, they suggested that where the surface may create a conflict, they'll simply access the mineral via a nearby property where their lease covers both.
This reminds me of similar coal/surface issues in Harrison County. Many landowners years ago kept coal rights when selling their farms to others. My family's farm had to be purchased twice by Consol before mining -- one owner had the coal rights; my father had the surface.
If you want a good attorney, I recommend Johnson & Johnson Law Firm in Columbiana County (Canfield). I've spoken with them after seeing them recommended for landowners via the Ohio State University and Ohio Conservation grouops. Their advice to me was quite helpful. They work quickly for their fees and don't charge you for research they've already done in years of advising about oil and gas leases.
They assisted with my Harrison County lease -- great addendum to the basic Chesapeake/Kenyon lease protecting surface interests!
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Permalink Reply by Finnbear on
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More reading on the subject in the attached file.
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Crude Awakening.pdf, 1 MB
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