I'm part owner of mineral rights on 60 acres of land up in Fresno Ca and recently was contacted by a firm that represents the new land owners about putting a solar farm on all 60 acres. In the contract it states that there would be no access to the land when this project is up and going and would have a project life of at least 35 yrs. My question is has anyone gone through this and what might this do to any future oil lease that might come our way? They did not offer much money wise and it's for the surface down to the 500 foot depth so I'm a bit confused. Any help or advice would be appreciated. thanks
I would think that surface use of solar would make it impossible to have any oil and gas lease that allowed for surface use. Depending on location, that may or may not impact your ability to lease the minerals. If horizontal wells are developed in that area they will likely have to pool acreage into large blocks, where they will not need surface use of all tracts. However, the ability to have a drillsite on your minerals may make them more valuable, for the surface owner especially.
You have likely received a surface waiver agreement whereby the solar company is seeking you to waive your rights to use the surface. I cannot tell if you are a severed mineral owner or co-own both the surface and the mineral rights. Either way, however, as Mr. Kitchen correctly indicates, you would have no ability to use the surface to conduct oil and gas exploration if you enter into such agreement. While 60 acres can be reached via horizontal wells located on nearby surface, the solar plants being built throughout the Central Valley are large and likely will take surface around you as well. The better recourse is to reserve at least one drill site out of the surface waiver so that any oil company who may wish to explore your mineral interests will have access via the surface.
Thank you both for the replies. They called me monday and up the offer a few hundred dollars more but I told them I wasn't convinced this was in our best intrest and I would need to look into this further. The funny thing is this is currently being leased for 5 years by Conico Phillips with about 2 years left and when they first contacted me they said they were in talks with them about that lease. I contacted the man that worked the oil lease and he said he would make a few calls and check in about it for me. Looks like I may need to have an attorney who knows about this help out.
Michael,
You have spotted the tiny tip of a huge iceberg that mineral owners be crashing into. Your foresight is commendable. After decades of managing minerals for the mutual benefit of mining companies, oil and gas producers, and owners with surface and minerals. I've recently identified a new challenge brought about by wind and solar energy's growing popularity in areas with well known but undeveloped oil potential.
Politicos wanting to jump on the renewable energy band wagon and shortsighted fee owners wanting to make a short term gain in land leasing to wind and solar companies are creating future conflicts with other mined mineral rights holders.
In another western state, tens of thousands of acres in three counties are in already in conflict. Unilateral wind farm commitments over 5000 acres threaten to keep oil and gas exploration off the land of one single owner. In addition, owners of large agricultural based ranches are finding it difficult to realize fair prices for the family ranch because of wind farm surface commitments. Owners of adjacent large ranches are hesitant to accept what appear to be advantageous income situations for fear that they will be accepting a dollar now but inadvertently relinquishing ten dollars of future income and compromising the agricultural base at the same time.
As usual, it will be the mineral and surface owners that get caught in the middle and bear the brunt of the conflicts. For my part, I have enlisted the aide of a wind power executive so I can understand that business while looking for a way to meld the technological and production needs of both industries in to a workable future for my mineral owner clients.
Choose a lawyer with both minerals and renewable energy contract experience.
Not sure about California, but the agreement with the solar company may put you in breach of your lease with Conoco if you impair their ability to develop.