Surface lease

When leasing came through our area , O&G co. Offered some landowners mineral leases that includes surface rights.   most of my neighbors knew what this meant and had them remove it from their lease, others signed boiler plate leases with the surface rights usage included.  A neighbor in the area has just been included in a drilling unit.  She is now afraid that the oil and gas companies will have access to her surface rights forever once the well is drilled.   I believe her original lease was with Chesapeake but it was sold.   I told her it probably depends on the language in the lease and who is interpreting it .   I requested to get the page from her lease that describes the surface right usage .   It does NOT appear that the oil and gas companies will even have to step a foot on her property to drill the well, Or to get to and from the well.    

Anyone had any experience with this?  I know it probably depends on the exact written language in the lease.   

 My neighbors main concern is if she would try to sell the property having a surface right lease attached to it would be problematic .    Any thoughts? Thanks for your reply , I will try to post the lease language once she sends it to me.

Views: 1953

▶ Reply to This

Replies to This Discussion

Permalink Reply by Becky Moore on January 15, 2020 at 10:11am

How many acres do each of you own? 

Permalink Reply by Joe Bezel on January 15, 2020 at 6:47pm

If she's not getting the pad, it seems to me her big worries would be either an access road or gathering line. She should talk to her attorney.  Good reason to NEVER sign anything relating to your property without your attorney's approval.

Permalink Reply by FRACIN MY CH4 on January 16, 2020 at 5:45am

Thanks joe. 100% agreed on never signing a document without GOOD oil and gas counsel.   After looking at the 640 ac (3 wells permitted ) drilling unit map on ODNR, She is at the opposite end of the unit and the pad will be across the street , so in my opinion there should not be access roads or gathering lines on her land.  there is a pipeline that is near the pad location , gathering lines should not be a factor but I am no expert and there may be proposals in the works that I am unaware of.  

I personally would not buy land (surface) that is under an Oil and gas lease that includes surface rights Because of all the unknowns  regarding the lease language - designed outs/ loopholes , trickery, double meaning  and of course who is interpreting this in the courts. 

Permalink Reply by BW_Appalachia on February 6, 2020 at 12:57am

You seem to be aware of most of the variables here, but oil and gas leases by default come with surface rights because the mineral estate is dominant to the surface.  This is why you need explicit language to make a lease a non-surface agreement, as you have done.  That being said, a default lease does not give the E&P carte blanche to do whatever they want with the surface.  

If they are interested in using your neighbors surface for any reason related to the development of the unit, they will need to negotiate a SUCA and compensate her for that use.  

Hope that helps.

Permalink Reply by FRACIN MY CH4 on February 8, 2020 at 3:28am

Thanks Bw, The attorney did tell my neighbor they would need to structure a contract if they wanted to use her surface but she did not mention being paid  for such surface use .     I will inform her just in case the attorney did not advise her of being compensated for any such surface use .

Permalink Reply by BW_Appalachia on February 10, 2020 at 2:08am

Sounds like the attorney is on it.  If they are aware that an agreement is needed, then there has to be some consideration on your neighbors side. SUCA stands for Surface Use Compensation Agreement, so that should be what she's presented with as a starting point.

28clr6acuhbmvPermalink Reply by 28clr6acuhbmv on January 20, 2020 at 5:17pm

Some things are worth repeating, so I'll say it again:

In 2018 the Ohio Supreme Court ruled in Eric (kitchen table) Petroleum vs Landmen (who he stiffed over a $10 per acre bonus that was promised but not paid), that in Ohio O&G leases and contracts are Real Estate Contracts, and these contracts must be NEGOTIATED by an Ohio Licensed Real Estate Agent.     https://law.justia.com/cases/ohio/supreme-court-of-ohio/2018/2017-0...

Any O&G Contract negotiated in Ohio prior to May 2019 ( Quick Fix by Elected Officials -  https://www.lexology.com/library/detail.aspx?g=71300101-b7e9-4418-9... ) by other than the above required Ohio Licensed RE Agent was signed in violation of Ohio Law. Any document signed while in violation of Ohio Law is VOID.  Therefore Ohioans will be set free of Chesapeake & Encino in the near future.

We will be dealing with the US Treasury after the owners, ceos and board of directors of the above 2 companies are Indicted and Convicted in a Military Tribunal for their corruption.

Likewise, the laws of Ohio will once again be enforced against O&G companies.

Please let me know how the above doesn't meet the 12/21/17 Executive Order "Severe Human Rights Violations & Corruption" if You don't agree.

Also review the Miltary Tribunals Executive Order at whitehouse.gov updated in 2018 by Our President Trump for 2019 and beyond.

Too many judges have been on the take, so they will be introduced to Military Tribunals and won't be around to help their favorite corrupt corporations & corrupt elected officials.

It's all in Black & White. Read it and weep, or get happy if you have been the object of their corruption.

Permalink Reply by FRACIN MY CH4 on January 21, 2020 at 8:42am

that’s good stuff Ron thanks for the info.  I will let my neighbor know about this but I think she was approached by a direct company representative, Regarding o&g lease.     She contacted me over the wknd and said she did meet with her lawyer last week in which he informed her that if she is included in a well and receiving royalties , the surface lease language will remain in effect as long as the well is producing product & royalties.    She also Found out there’s a pipeline project that has two proposed maps showing the lines running through her property.  She said she knows her land value has depreciated with this surface lease attached but she felt good enough with getting two rounds of high bonuses paid out to help offset the depreciatedland value.   I hope she is able to get a good I pipeline contract and a fair price.  If  I get these details I will start a separate updated pipeline contract discussion

28clr6acuhbmvPermalink Reply by 28clr6acuhbmv on January 22, 2020 at 4:49pm

Tell Your Neighbor not to worry about her land value. The county has more than likely ramped the value up to $9,000 per acre in their attempt to gather all Landowners holdings using the Real Estate Tax scam.  That will end soon enough.

With Encino paying a 0.1% royalty and the county taxing as if we are getting a real royalty, the money would surely have run out. That's why God is stepping in, the counties/state would have owned it all.

You might volunteer to read Your Neighbors Right Of Way contract in case it's one of the Cardinal Gas Services (owned by Chesapeake Energy) contracts that are worded to steal the surface rights of anyone who has signed. CHK's greed is Biblical, they wanted it all.

Take a look in any Ohio County Recorders office on line records and find a Cardinal Gas Services ROW contract...."Cardinal Gas Services owns the surface rights into perpetuity",  will be near the last sentence of the contract. I still have the copy the landman who was previously employed by US Homeland Security gave to me to sign. What an insult to my intelligence. Going from protecting US Citizens to stealing from them is inexcusable.

Prior to the Corruption Executive Order being signed, then the Ohio Supreme Court saving our fannies by upholding the Real Estate License requirement for O&G Negotiations, this was a major issue for Ohioans although no one has discussed this.

The ROW money for Ohio Pipelines has been going to Chesapeake in Oklahoma, instead of to the Citizens of Ohio.

Theft from any one Ohioan by an O&G company affects EVERY SINGLE OHIO CITIZEN, in Our Wallets, and in the Ohio Treasury.

The BRIGHT FUTURE that was promised then stolen from Ohio and the US will come back to us soon. No one can stop what is coming, no one.

Permalink Reply by FRACIN MY CH4 on January 29, 2020 at 3:51pm

Just received my property tax bill , taxes have gone up but not substantially. 

I remembered your post regarding the rip off ROW contract that Cardinal gas services uses to steal surface rights.   As soon as my neighbor mentioned a proposed pipelines,  I let her know to be aware of scams that some companies are using to deceive land and mineral owners.   

 I appreciate your passion, time and energy for helping some landowners avoid making critical mistakes.  

Permalink Reply by Dan on February 10, 2020 at 5:07am

A lease to drill will eventually go away.  A ROW agreement is forever. 

Permalink Reply by BW_Appalachia on February 10, 2020 at 5:20am

Not necessarily true on either account.  A lease to drill can be as forever as a ROW.  Both go away without activity, both can last forever with activity.

A SUCA is neither of the above.  The lease that is not a non-surface lease allows for use of the surface by the nature of dominant/survient estates, and a SUCA ensures that the landowner is compensated for such usage.

RSS

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

Badges  |  Report an Issue  |  Terms of Service