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How do you go about getting Oil and Gas companies to drill on your land?

Nash, TX |

For obvious reasons, my family and I are interested in learning if there is any oil or any type of valuable minerals underneath our land. How does one go about securing a company for drilling?

Attorney Answers 5

Posted

If your land is in Texas, your first question needs to be "Do I own the minerals under my property?" You may find out that while you own property, you don't have any rights to the underlying oil or gas, if any. That question may be best answered by retaining a landman to review your title to find out what your mineral rights are.

As for getting an oil and gas company to actually drill on your land, that's a difficult proposition if they are not already knocking on your door. Prior to drilling, an exploration company would want to put your mineral interests under lease. The easiest way to determine if there is an appetite in the industry for leasing your lands would be to review the county title records to see who, if anyone, has been leasing in the vicinity of your lands recently and then contact those companies to ask if they are interested in leasing. Again, a landman would be able to help identify those companies if they exist.

Just because a company is leasing nearby doesn't mean they would be interested in your property--that depends on a lot of factors, including geologic structures under the ground and the company's leasing budget for the year. If you do find an interested exploration company, at that point it would be advisable to retain an experienced oil and gas attorney licensed in the state where the land is to make sure you get as favorable a lease as you can.

After all of that, the company may still never drill on your property even if they have a lease. It all depends on many factors and circumstances outside of your control that need to convince the company to spend a lot of money on the chance there's something worthwhile under the surface.

I hope this helps, and I hope you find a happy resolution.

Disclaimer: This answer is provided for informational purposes only, does not constitute legal advice, and does not create an attorney-client relationship. Actual legal advice can only be provided after completing a comprehensive consultation in which all of the relevant facts are discussed and reviewed.

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Posted

Companies spend lots of time and money determining when and where to develop. First, do you own the minerals? Just because you own the surface, does not necessarily mean you own the minerals. Second, is there any production in your area? Can you see wells in place on the neighbors? You can find a geologist who might be willing to give you geologic review to see if you are to be in a known mineral area? You could also visit with an oil company in the area to see if they might be interested. Just because you have minerals in Texas, does not mean there is anything to drill, or drill at a profit. However, there may be some attorneys on Avvo in Texas that may have additional insight. You might try the "Find a Lawyer" function. Best of luck.

This answer was provided for general informational purposes only and is not an offer to represent you. You should not act, nor refrain from acting, based upon any information contained within this answer. Neither the information in this answer, nor your receipt of it, creates an attorney-client relationship.

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(Don't call us we'll call you) is the typical philosophy of oil companies. They spend lots of time and money developing prospects. They will either analyze old seismic data or run new seismic in an area prior to leasing. You will be the first to know when the leasing starts. To put your mind at ease you could call an oil company in the area to see if they might be interested. Most likely they would have already contacted you if they were.

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I agree with most of the comments made by my colleagues, but I would add this: When you negotiate your oil and gas lease with the producer you need to include a drilling commitment. For example, you should demand a clause that within 1 year they have to "commence operations" and within 2 years they have to actually drill and produce on your property or other property in the unit. Most companies will not agree to this term, especially in PA as the infrastructure is lacking.

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Posted

First of all, to offer any legal advice in Texas, one has to be licensed as a TEXAS lawyer. Please recognize that before relying on any internet advice from strangers. I am a Texas Attorney and do Oil & Gas Work. We are working representing a few property owners in the next county over for potential prospecting.

It is not anywhere are hot as other shale locations that are ongoing and producing serious returns. However, you can look at the two links I've provided to get started as see where else there are active wells and producing leases. For a company to sign a typical lease means paying a upfront cash Bonus then a delay rental yearly and then they don't discover oil or gas in paying quantities within the first lease term, paying again to renew the lease. Exploratory wells cost about $1,000,000 for the depth to get to interesting formations around there, unless it is a specifically better precise location. So, unless it really looks good, you can understand why folks are not running to invest purely speculatively in not well proven areas.
As to who should represent you, the only person out of the bunch recommended to you from the others here who have your legal interests in heart and who owe you actual fiduciary duties to not act around or violate those duties, is a licensed Texas Attorney. No landman owes you such duties generally and they can simply flip your land off for their own deal. Be careful...

Some law firms, such as mine, will accept a small capped partial assignment of the potential minerals to help get them developed for a property holder. There also are some new hybrid type mineral prospecting companies that use a very new advanced type of passive seismic to do preliminary underground assessments at a much lower cost than most regular seismic. One European firm we are working with has about an 80% success rate and depending on the location, they too also can take a partial assignment of minerals in return for a 3-5 year lease (instead of paying a Bonus on signing). If they can't develop it, they release the lease back after 3 years to the property owner. If they do develop it, the owner gets a royalty payment. It is something you may want to consider.
Best wishes.

Edward

We provide Strong & Cost Effective legal work in Houston and Dallas offices, as well as, by appointment Statewide. We will come to meet you in Texas or beyond... FREE CONSULTATION !! The information provided here is not legal advice as no attorney client relationship exists between us unless you contact us and arrange for services. PLEASE CONTACT OUR FIRM DIRECTLY by clicking on my name above and going to our AVVO profile to reach us by email or phone to set up a consultation. We work 7 days a week and often can return calls or meet evenings or weekends! ! We want to become your lawyer!! Please MARK my answer as BEST or HELPFUL if it is, please !! *** PLEASE JUST CONTACT US DIRECTLY IF YOU WANT US TO READ YOUR COMMENTS*** Thank you. Edward Kazaleh

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