An oil company has offered $2,500 per acre for damages to place a pad on our land in McKenzie County. Also offered is $2,500 per acre for road access to the drill site. Is $2,500 a reasonable amount to be paid for damages?
In a word, no. It would not take much of a headache before you would look back and ask yourself, why did I ever let them on my land. You do realize this could be a surface use of up to 50 years or more? Is $50 an acre per year, or less enough to put up with having them on your land? Unless the pad is in the middle of a city park, with city police watching it, there is going to be trash at the very least.
Initial payments/damage payments as part of the compensation for entering into a surface use agreement are not the most important aspect of the agreement. Such payments, like cash bonuses for leases, are soon here and soon gone. Focusing on the terms of the agreement is much more important.
David L Ganje Ganje Law Offices Web: lexenergy.net
605 385 0330 701 355 6885 518 437 9000 d.ganje@ganjelaw.com