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Permalink Reply by adubu on June 3, 2011 at 10:44

If you have no minerals in well that they need to drive truck across your land to get oil and then drive back across to get oil to market ( this well in another unit) I would sign negoiated agreement easement that charges them a set fee for each trip they make. They will have to build you a road and maintain  it. Charge going easement for access and land damage payment up front  plus on going fee for each trip. Question how did that get to that well to drill -- did that come across your land?

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Permalink Reply by jack on June 4, 2011 at 10:10

Thank you for your input.  They haven't drilled wells yet.  They are putting 2 wells on one pad.  One I will get royalties on and the other I won't.  I believe they are trying to get me to sign the easement in lieu of any interest in that 2nd well.   So basically neighbor is getting a producing well via my land.  Neighbor is also getting a 10 acre tank so he'll be able to sale the water.  I'm getting pad, wells, tanks and seperators on my property.   

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Permalink Reply by adubu on June 5, 2011 at 5:20

jackie---so you have given them a ROW for the pad site on your land or in process negotiating same sincethey have not drilled yet.  One well will include your minerals in the unit. I assume the pad site is close to border of another unit and they will directional drill a 2nd well off this same pad site to save building another pad site in the other unit to drill. A horizontal well need at least 5 acres or more to drill and cost about $250-300,000 to build. That the saving to operator is cost of 2nd pad site. I guess the 1st 330-several hundred feet of drill pipe bore will go under your land therfore they need subsurface easement is this what you are talking about?

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Permalink Reply by jack on June 6, 2011 at 3:52

Hi -- no ROW given for pad yet either -- negotiating.  I have been told you can get at least 30k for the pad.  The (2) wells are 23 feet apart.    It sounds like they will will not frac until on the other guys land.     The subsurface and surface easement are all about the other well.  Think I should negotiate having my well drilled first? 

 

Sounds like you have the gist of it.

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Permalink Reply by Jack Blake on June 3, 2011 at 11:49

They will pay good $ for anything.  If they want you to sign they will pay real good $.

I would do seperate deals for surface easement and sub surface easement.

Make oil company make the offer first.  They will ALWAYS pay much more than they initially offer offer.

On subsurface easement I signed I got 10 times their original offer.

 

On surface P/L easements I've been paid anywhere from about 1.25 TO 6.5 times their original offer.

Jack Blake.

 

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Permalink Reply by Two Dogs, Pirate on June 3, 2011 at 15:21

I am with adubu about how they crossed you in the first place? If you signed off on a ROW then it is a probably a done deal.

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Permalink Reply by jack on June 4, 2011 at 10:12

I haven't signed anything yet....no right of way signed for sure.

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Permalink Reply by jack on June 4, 2011 at 10:11

I agree about making them make first offer.  We are not dealing with a  landman now....someone higher up who seems real hardnosed.  I think seperate deals for each is a good idea...just not sure given subsurface and surface rights on almost 7 acres is a good thing to do.

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Permalink Reply by Jack Blake on June 4, 2011 at 12:10

Yes, any surface agreement needs to for sure have a platt of property showing exactly what the easement is granted for.

 

On a subsurface wellbore easement I did I put in the contract that they would provide me a map of the well within two months of it being completed to show where the wellbore went under my property.  They never did send me a map showing this.  In the subsurface wellbore easement I should have tried putting some penalty clause about they would pay me $500.00 per month for every month they were late sending me the map.  If at all possible there needs to be penalties they pay if they don't live up to their end of the contract.

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Permalink Reply by Joe Aldridge on June 4, 2011 at 0:31

Jackie,

I would get them to make an offer first. I am assuming they have done that. If they haven't then I would ask what's in it for me? 

One idea that you might want to consider is asking for a 1% override from any product produced from the unit they are servicing through your property. 

Would love to hear how this comes out with your negotiation. 

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Permalink Reply by jack on June 4, 2011 at 10:14

would the 1% override be different than asking for royalties?  I just see how I can not profit from a well being drilled on my property on the same pad as my well and not be pooled in 2 different units.

Thank you for your input.

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Permalink Reply by Joe Aldridge on June 4, 2011 at 10:54

Yes, it is different; it would be a payment on all production from the unit because they are using your property as the drilling pad. In addition to the override you may want to try to get a minimum rental per month. You really need to get an attorney involved and have the company pay his fees to write the contract. Good LUCK and I would love to know how this turns out. We can email thru this web site but we have to be friends to do that.

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