Replies to This Discussion

Permalink Reply by P.G. on June 6, 2011 at 5:22

I would think, in that case, that one would want some kind of reoccurring income to at least cover the taxes and liability insurance..

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Permalink Reply by Joe Aldridge on June 6, 2011 at 6:25

Nothing is going to happen to the property taxes. The company will be assessed the property tax on the well, well site and any production equipment. The land owner in not going to have to pay any property tax because of the drilling site or well.

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Permalink Reply by P.G. on June 6, 2011 at 7:01

What about the liability...what if some idiot kids sneak over the fence to take a dip in the frac pond and gets hurt? Insurance might be a nice thing to have if one owns the property...

I saw a situation in Indiana where there was a asphalt/gravel pit operation that had fences and warning signs and some kids sneaked in for a swim in the gravel pits and one of them drowned...everybody got sued..

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Permalink Reply by Joe Aldridge on June 6, 2011 at 7:04

There should be a hold harmless in the lease and/or addendum. I would never sign a lease without one.

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Permalink Reply by P.G. on June 6, 2011 at 7:08

Can you contract your liability away in Louisiana?

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Permalink Reply by Joe Aldridge on June 6, 2011 at 7:33

PG,

I have no idea. If you are that concerned then if I were you I would not lease or allow a company to even drill near my property.

All I know is that according to my attorney with a good hold harmless clause it should  protect me. One that I use states:

Lessee shall be solely responsible for all damage to property and injury to persons, including death, by reason of, or in connection with its operations hereunder, and does hereby agree to protect, save harmless, and indemnify Lessor from and against any and all claims and liabilities for damages to property and injuries, including death, to persons, including, but not limited to, Lessee’s employees, agents, and contractors, such damages and injuries arising out of, or in connection with Lessee’s operations hereunder, and Lessee shall, at lessee’s sole expense handle all such claims, defend law suits, or other actions which may be brought against Lessor therein, pay all judgments rendered against Lessor therein and reimburse Lessor for any expenditures which it may make on account thereof, including but not limited to Lessor’s attorney’s fees and costs of defense, unless such damage or injury is caused solely by Lessor’s acts, omissions or negligence. 

I carry a standard liability policy on the farm that should cover me and my actions if I've invited someone on my property and they were harmed. 

If you are that concerned about being sued SELL YOUR PROPERTY AND HIDE IN A CAVE SOMEWHERE!

Secondly, she is not getting the Frac Tank, her neighbor is.

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Permalink Reply by P.G. on June 6, 2011 at 7:49

No not going to find a cave..LOL!

Just wouldn't want to have any surprises after signing on the dotted line..If future costs could happen, be better to get them addressed before agreeing to any contracts..

I notice there is a weasel clause in your clause "unless such damage or injury is caused solely by Lessor's acts, omissions or negligence" 

Who knows what that might be from the way some judges have ruled..Look what happened to McDonalds and that hot coffee deal...

 

Permalink Reply by adubu on June 6, 2011 at 8:36

Joe---if you would not desire  a company to drill on your  property then that person must not own the minerals under lying the property. True you could denied leasing this is only way to stop them from access to your surface. BTW you can not stop them have harvest of the minerals if leased even if it means puting pad and rig on the property to drill. The mineral owner or lessee has right to access the minerals. You can maybe have them build pad on adj property and directional drill under your surface to drain the minerals.

Permalink Reply by jack on June 6, 2011 at 4:41

that is something to think about.  Don't think I would sell land though.   

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Permalink Reply by Joe Aldridge on June 6, 2011 at 4:49

No, the company pays the property tax on the pad and any installation including the well bore and all equipment used to produce the well. If the land owner sells the property to the company then that remaining land that was not sold to the company will be taxed at the rate the sale was for. At least that's the way it is in LA. Definitely DON'T sell the property.

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Permalink Reply by Wonderland on June 12, 2011 at 16:47

Our family received surface damages for the pad plus an annual rental payment for as long as the well is there.  The rental payment goes up 15% every 5 years.  We also received payment for the subsurface easement under our land and surface damages for the access road across our property.  This is for a well on our surface into a unit we do not own minerals in.  We do own the minerals under our property.  The well is a directional well.  We tried to get an override to no avail.  The annual payment should more than enough to pay our property taxes.  We got a hold harmless clause and a requirement that they defend us against any claims against us related to their operations.

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Permalink Reply by jack on June 13, 2011 at 2:44

Thank you for the information...very helpful.  Is your property located in Eagle Ford Shale?  Did they also put a well on your property on the same pad? 

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