Only a few years ago I became an heir to several mineral rights deeds. I have been researching how to get the deeds 100% in my name as the other beneficiaries do not want any part of being involved.
Today, I received an email with attached docs to sign for a Mineral and Solar Set-Aside and Joint Use Agreement. Before receiving the email, I spoke with the Landman/ Percheron regarding certain land to be used to install a solar farm. They have $2,500 to give to heirs to proceed. I don’t believe they have started but I’m not sure.
I did a little research and found several listings telling owners of mineral rights to beware of solar companies wanting to lease your land. And as they stated, the contract was written by a lawyer and it is confusing to decipher as to a number of items that I read to forewarn.
I cannot afford a lawyer to discuss this with and determine my best course of action.
I imagine that the company is seeking a “surface waiver”. This is going to be an oversimplification. For background, the mineral estate is considered to be the dominant estate and the surface estate to be the servient estate. Thus if the minerals are severed from the surface, oil and gas exploration can still occur even over the objection of the surface owner. If the surface owner wants to sign a solar lease, then the solar company has significant risk in the event that their solar array is the location chosen to drill the well. Therefore, in addition to obtaining a lease from the surface owner, the company will also seek “surface waivers” from the mineral owners. This can greatly reduce the area that a later oil company can explore and may even cause a mineral owner’s asset to become virtually worthless. Some mineral owners seek to minimize the the devaluation by limiting the area that would be subject to the “surface waiver” and thereby reserving a significant area as a set aside that could be used by oil companies to explore & develop.
Review and negotiating a “surface waiver” for a mineral owner is not cheap. Among the things to be considered is past and present production. It is also good to know about O&G development nearby.
This post is not legal, investment or tax advice, it is for discussion purposes only. Reading or responding to this post does not create an attorney-client relationship.
Thank you for your reply. I accidentally misspoke in my original post. I do not own any of the land and I know that. I was getting confused with all the research I was reading.
My sisters and I only inherited a little over 10 acres of mineral rights in the section that the solar company wants to use. I have cousins from siblings of my father that also own inherited the same amount. I have been messaging one. He says he will talk with me but he doesn’t respond very well. My sister says she will follow my lead. I have yet to get in touch with cousins from the other sibling of my father.
I spoke with the Landman again yesterday and I believe he isn’t honest with me. When I referred to the contract, he stated he had no knowledge of a contract. Then as we kept talking and he was explaining to me about the land the solar company wants to build on. Then he referred to an :Exhibit: page that was included with the contract. I told him that I was unable to determine anything looking at that page. Therefore, he sent me a new map from the Texas RR that showed the entire section they want along with other sections around it. The interesting part that he brought to my attention is all the drilling in sections to the north and west of mine. He said they cannot put solar where there are wells. He also kept assuring me that this land has never been drilled on and probably never will be as it is bad desert land, not even good for farming or ranching. He also stated that we are being left with 500 ft of land all around the area that the solar panels will be installed on and that we can still drill or whatever else. But the contract does not explain how they intend to get to the area they need without encroaching on any of the 500 feet (one of the warnings I found in a listing that also included they need to give details on roads they need to make and all the equipment they will be taking across our 500 ft). He stated our land can still be able to be drilled on because they are only doing horizontal (not vertical) drilling and have been for at least 15 years. It seems to me that if drilling can still be accomplished under solar farms, then why can’t solar farms still be built over wells, especially since he said they don’t dig underground to install the solar? Well, that is a false statement as I found many You Tube videos on how these solar farms are built and they do drill down 3 meters to have the posts to attach the solar panels to. I Googled horizontal drilling. I discovered that they “first” have to drill vertically to get to the depth they want to drill to change direction and drill horizontally. He also got very jumpy when I reminded him that he said something in our first conversation that stuck in my head. He said, “I don’t really like solar. I am an oil & gas man myself and solar farms are taking up a lot of oil & gas fields to install the solar. People aren’t really thinking about all the products that we use oil & gas to make. Once these fields are gone, then what do they plan to do?” He said he could be fired for saying that if his company found out. That concerned me deeply.
I asked if installation had started. He said no, they need more mineral rights owners to go in with it. I asked how many have. He said over 50% but they need 80% to get started. He continued to say that they land owners have signed off and okay with this project.
The landman stated that “they” would pay for a lawyer to review the paperwork and explain it to me. He stated that no one is trying to take away our mineral rights, but I believe otherwise. I want to meet with a lawyer and I believe my cousin and sister would be interested in being in on it. Do we have the right to pick they lawyer we wish to use over their suggestion?
I want to thank you tremendously for your assistance. You were spot about the situation. I guess we have to try to get a lawyer to assist us to stop the production before they get that 80% thumbs up.
One would need an attorney experienced in your state as the rules differ and the language must be perfect according to state law. There is a session at the National Association of Royalty Owners National convention in October in Tulsa. It’s title is “Subordination Agreements on Solar Farms and Real Estate Developments” The speaker is Parks Brown. ( I do not know him.)
Ma’am, I appreciate your reply. Even though I live in Nevada, the mineral right’s are located in Yoakum County TX. I have contacted an attorney that published a pdf on this exact topic. I am in hopes of getting at least an answer as to press on with them or not.
Excellent idea on the attorney. You really need to get advice from a specialist attorney in the state where your mineral rights are located as the contracts need to be worded to work with the state law.
I negotiated one a few years ago ( surface waiver agreement) i am no Lawyer as such not legal advice just my experience. I negotiated 5 acre tracts in each corner once solar panels on the ground on half section, and full rights to develop until said project comes to pass, upon completion a yearly royalty fee for min 25 years ( warrantied lifespan of solar panels) being renegotiated then to current energy prices., nothing much but about what CRP paid when owned the land, several years ago. so cant complain just owning minerals, if they ever get approval. To think a relative suggested we sign for free to help them out, If they build site ; a little time on non productive mineral estate turned into long term income. The most ingenious thing i did seems obvious now but 2 years ago no one gave it thought so got to include it with little opposition, that was a inflation clause, with no downside, negative cpi = 0, positive increases my royalty per acre cumulative every 5 years, its looking like "if " it comes to pass i will see 50% more per acre per year than i started with. i knew we a a serious battle with inflation coming others thought what’s 2% going to matter. If we could just get them to accurately report what inflation we have, believe i used CPI-C. Well that’s my experience, googled a lot of legal language, terms, etc… always search as a contrarian to what you need to know, think like your oppisition, hope that helps, it wont even cost my 2 cents.
Have you gotten any clarification of mineral owners having to give up top 500’ to solar. We have gotten a contract from same company and this concerns us. Why do Solar companies want 500’ instead of 25-50’.