I’ve seen this ad a few times while watching the Sunday football game and I often wonder what the rest of the story is - “Ault, Colorado Television Ad” – do they receive enough royalties to offset impacts and help finance otherwise deteriorating farm operations to allow the farming operations to continue, did they negotiate an iron-clad surface use agreement that satisfied their needs, or do they just have a good operator right now? In any event, despite what you see on TV, hear from a landman, or even read on the Internet, there is still a need at the end of the day to revise written documents offered by oil and gas companies to comport with your expectations and wishes.
Are Oil & Gas Documents Fair?
One of the common questions we receive as to oil and gas documents is whether they are fair. The answer quite honestly is no in most instances.
Companies have worked hard to draft agreements to protect their assets, including the leasehold interest, and the documents stack the cards against land and mineral owners. Unless you work to revise and undo those terms, the next document you sign may be your last in that it is unlikely to terminate or otherwise afford an opportunity to re-negotiate in coming years.
Do Documents From the Company Adequately Protect My Land?
Many landmen will genuinely advise a landowner that a surface use agreement will be negotiated years after the lease is signed or that the surface use agreement is the same signed by everyone else in the county. While these two points may be true, the part that is lacking is
- The cards will be stacked against you if you negotiate surface uses later because you already granted rights to the surface via the oil and gas lease, and
- The old adage of jumping off the cliff doesn’t necessarily apply to the next guy and better terms can often be negotiated.
This all plays into the notion that surface use agreements as initially offered do little more than to grant the company broad access to the property and rates that you may be living with for decades. As drafted and initially offered—surface use agreements do little to adequately protect the interests of most farmers and ranchers.
At the end of day, don’t always believe what you see on TV, or if you do, be sure your written documents reflect what you want protected and what your expectations are as to oil and gas development so, if you choose, you too can be satisfied with oil and gas operations on your property like the video. There is no right or wrong answer, only the answer that’s right for you, your family, and your property.
Jenna H. Keller, Esq.
Attorney at Keller Law, LLC. (www.kellerlawllc.com)
Jenna H. Keller 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 in Nebraska and Colorado.
The information is for general information purposes only. This 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 does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided.