Hey, so back in 2007 some friends leased some surface rights. It was ag land the family had been considering developing for a long time and it was already surrounded by subdivisions and retail. Anyhow, they leased them a large parcel, over ten acres, with the right to drill a couple a well and use the rest for offices and an equipment yard. That seems to have worked out fine.
So, now they come back and want to add a bunch of new more wells. They say they are going to be directional wells with numerous targets much farther from the surface location than was ever possible in the past. It sounds like it could be a money maker for a lot of people in the area, and that is a good thing.
But my question is what in the world are these surface rights worth in today's market? I know they will eventually get an attorney involved, but has anyone else had this sort of offer?
Insufficient information to offer an informed opinion. Go see an experienced O&G attorney.
A couple of thoughts here:
Unless the surface owner is experiencing some sort of moral dilemma, the question as to whether additional wells should or could be placed upon a site is up to regulators. The density of feasible surface well locations has increased with directional drilling accuracy and proficiency.
The footprint has not changed - compensation is then usually determined on a unit basis (well-by-well) with consideration based upon impact and length of term extended by the new well(s) and/or surface sites. In short, if the agreement is based upon a term “for as long as wells located on the lands are producing”, a new well will extend the term of use. That extension is worth something, as it prevents the surface owner from having any other use for some extended period of time. That translates into value.