Negotiating an oil or gas lease on your property is not something to take lightly. Whether you are a mineral rights owner or surface rights only owner, you will be affected for many years to come if a productive well is drilled on your land.  Here are some tips on protecting landowner rights in oil and gas leases.

What Rights Do Landowners Have In An Oil Lease Situation?

The owner of a piece of property, (if they own the mineral rights) can choose whether they want to allow an oil and gas exploration company to drill on their property. There’s much more to it than that. The landowner’s rights in an oil and gas lease are to agree on an amount of payment for the right to explore (the lease payment), and the amount of royalty they will receive in the event oil and gas is discovered.  In addition, they can negotiate all kinds of oil and gas lease terms, such as “if a pooling agreement is entered, does one oil well hold the entire lease?” or to what depth the lease goes. Depth of the lease is a very important detail, since you may be able to lease different zones to different oil companies.  A landowner’s rights in an oil and gas lease depend on what is written into the contract. All oil and gas leases should contain language that state that the land is returned to its original condition or better after a well ceases production.  Negotiating an oil and gas lease is not an option, it is a requirement if one wants to protect their interests.  Savvy landowners may wish to negotiate an oil and gas lease things like use of oil company drilled water wells, better roads and gates, and much more. No one should ever enter into an oil and gas lease without knowing  their rights.  You should consult with an attorney to learn what your rights are and what extras you can negotiate for in an oil and gas lease on your property.  Many billions of dollars have gone into the oil company’s pockets instead of the mineral right owner’s due to faulty clauses in oil and gas leases. You should never sell your mineral rights if there is even a remote possibility of oil and gas being found on your land.

Landowner Rights Of Non Mineral Right Owning or Surface Property Owners

If oil and gas has been found near your property and you don’t own the mineral rights, you could soon see some major changes to your property, changes that can last a lifetime.  Landowners who don’t own mineral rights still have rights. Loss of income and present and future value  due to damages to your farm from oil and gas drilling must be paid for. You can make the oil company pay for every blade of grass that is disturbed on your land, within reason. There are generally accepted levels of compensation for surface rights owners to compensate for damaged fields, removal of grass, permanent loss of productive acreage, etc.  The key is to know your rights and have a good attorney.

Books About Landowners Rights In Negotiating Oil and Gas Leases

There are some very good books for those who want to understand more about oil and gas law to better negotiate an oil and gas lease on their property.  Along the lines of the “For Dummies” series, but at a college level, is “Oil and Gas Law In A Nutshell”. Chances are the landman  who has contacted you on behalf of an oil company has already read it.  A more basic book, which can help you understand the terms your lawyer is talking about is “Let’s Talk An Oil And Gas Deal”. Note: Books are no substitute for a qualified oil and gas attorney for the final deal though.

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