We have been approached by an oil company to dig a pond on our land, dig a water well, and lease water rights to them for 5 years for their fracking activities.
We don’t really want to do this, but we feel like if we don’t, some neighbors may, so the water will be gone anyway and we would get nothing.
The water district said the water levels replenishes after fracking.
Any experience with this? Annual lease price? We would absolutely have an attorney negotiate the lease so we are protected as much as possible, can use however much water we need, and potentially sell to someone else.
We are also considering selling our land, and if so we would assign this lease to the buyer for their benefit.
Your attorney will be quite busy. Sounds like the agreement will need to include damages for the pond and any pumping equipment to be installed. Also easements for pipelines used to deliver the water to the well or well’s. And of course the price for water. I’m hearing .45 to .65 cents per barrel in west TX. I would request access to the meter so you can monitor how much they are pumping. Sounds like it could be quite lucrative for you especially since it replenishes! Not sure how much is used to drill and frac a well but im sure there are others on here who have an idea.