Texas_A well drilled off the production unit
OK - it's Texas. An operator (A) wishes to have a drillsite that is not located on its actual production unit... it could be that a swamp is in the way - so - it negotiates to build a location on a tract NOT in the production unit and steer (either directionally or and/or horizontally) such that when the borehole penetrates the desired formation, it is far enough into the production unit - say - under the swamp . . . that it would be legal as far as the Railroad Commission is concerned.
Question - if the surface owner of where the drillsite would be also owns minerals that are leased to another operator (B), and (B)'s lease(s) say that the surface owner gave (B) the exclusive right to use the surface of the lands in pursuit of drilling/producing oil and gas... how does the surface owner have the right to "sell" a drillsite to (A) - especially if (B) wants to use the same land to drill a straight-down well and produce oil and gas under the surface owner's land?
Also, let's say that the owner does not own ALL of the minerals under his surface lands, and (B) has leases from other mineral owners. Because mineral rights trump the surface of lands in Texas, are (B)'s (mineral only) lessors being damaged, because (B) cannot drill/produce a well at the same place as what (A) talked the surface owner into?
Thanks -
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Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
If you don't get any replies here, try posting in the Know Your Rights Texas Mineral Law group. 156 members. When you do that every member of the group is sent a notice email.
https://gohaynesvilleshale.com/group/knowyourrightstexasminerallaw
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Permalink Reply by Chad Ellis on
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First, I am not a lawyer. However, we have had similar instances on some of our properties. Most of these off unit locations are treated the same as compressor stations, pipelines or anything you want to build on your property. Just as you can build a house, you can allow a drill pad anywhere there isn’t an existing easement or prohibition.. The difference is the addition of subsurface easements. It’s these subsurface easements that can conflict with the mineral estate. A legal review of the lease documents will provide clarity. These off site pads involve large enough sums to justify legal counsel. As for who gets to drill at that location, it usually boils down to which party gets a signed surface use agreement and delivers a check 1st. Future or planned use has no bearing on what you do today unless it’s in writing and accompanied with proper payment.
Generally, yes, the surface owner can grant an off unit surface easement or use agreement with an operator that does not have the development rights to the subsurface. Again, a good oil and gas lawyer is really the best source for the detailed answers.
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