If you’ve received an oil and gas lease offer you may have raised concerns about the use of the surface of your property with your landman. The response of many landman in southeastern Colorado lately has been that surface use concerns will not be addressed at this stage and instead will be taken up later when drilling actually occurs. While such statements may not be wholly inaccurate, such statements fail to explain that if you sign the “standard” lease offer today that the location of wells pads, pipelines, and related oil and gas infrastructure will be the operator’s decision rather than your own as a landowner. The lease offers being made today in southeastern Colorado liberally grant an operator the right to place wells pads, pipelines, and anything else oil and gas related wherever the operators deems appropriate and to use as much of your property as they would like.
What About an Operator With a Good Reputation?
In some markets, you might be able to fall back on the notion that you are signing a lease with a good operator that has a solid reputation of comprising with landowners on the location of surface disturbance; however, operators in southeastern Colorado have yet to be disclosed and in this market of swapping and trading leases, your best course of action is to protect your property in the oil and gas lease now.
How do you protect your property now?
If surface uses will truly “be addressed later,” then a no surface occupancy clause is preferable. A no surface occupancy clause prohibits all surface disturbances unless you expressly agree otherwise. In this instance, it becomes your call, rather than the operator’s, as to where well pads, pipelines and facilities can be located. If the oil and gas company will not agree to a no surface occupancy clause, then consider expressly including provisions in the oil and gas lease or a surface use addendum (to be signed at the same time as the oil and gas lease) that address and protect the surface of your property.
Whether your property is used as farmland, pasture, or CRP, you should take the time now to protect your property for generations to come rather than leaving it to the discretion of an unknown operator.
Jenna H. Keller, Esq.
Attorney at Keller Law, LLC. (www.kellerlawllc.com)
Jenna H. Keller defends property rights and provides legal services to farmers, ranchers, rural property owners, and severed mineral interest owners in the areas of estate planning, natural resources (oil, gas, wind), real estate, and water.
The information in this article is for general information purposes only. This article should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article.