Have a question regarding an oil & gas lease. A little history first. Property is located in Northern Michigan. There’s been oil produced adjacent to the property that hasn’t produced in 20+ years. Family got royalties from around 1970 til then. There’s also gas wells on my 200 acres that were put in when I was a kid. Like late 80s early 90s. They produce a little still. I was recently ( month or 2) approached about a carbon capture site. They were offering 20k. I didn’t know much about it, so I didn’t jump to sign. They came back with a 5 year oil and gas lease. I own 200 acres, but its split between a 160 and a 40 that are connected. The lease is for the 40. They are wanting to do an enhanced recovery. The lease they are offering is 4000 for the 5 years and 2000 for an easement. I don’t know if this is in line for an enhanced recovery project or if I’m being lowballed. Any info or advice given would be much appreciated.
In Gaines county, Texas, the Tall Cotton EOR project has produced more than 5 million barrels of oil from a single section of minerals. The owner of the minerals receives royalty. What royalty rate are you being offered?
Carbon Capture or Sequestration is an evolving area of the law. The ownership rights of the mineral vs. the surface owner are complex. One view is that the porous space belongs to the surface owner while another is that it belongs to the mineral owner. Still another view is that it belongs to the surface owner subject to the reasonable use of the mineral owner. Here are a few interesting articles:
Who Owns Pore Space for Carbon Capture and Storage? (b3insight.com)
CCUS State Legislative Tracker - CDR Law
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