Surface Use Agreement: Oil and Gas Owner Protections

If you own land that holds mineral resources, you may be able to access significant profit by leasing or selling your rights to develop those minerals. When you enter into an agreement that allows a third party to develop the resources on your land, it’s important to have protections in place regarding the impact on the surface. These protections are laid out in a legal document known as a surface use agreement.

‍

Mineral owners need to know about their surface rights and options for limiting the impacts of mineral development to their land. Keep reading to learn more about surface use agreements for oil and gas exploration.

‍

Key Takeaways

• Surface use agreements are made between mineral estate owners and mineral developers to protect the surface estate from excessive damage.
• You will need to negotiate with any buyers to establish surface protections through a surface use agreement, as there are limited protections under the law.
• If an oil and gas development company violates a surface use agreement, that agreement should stipulate penalties, and there may be further legal remedies.
• A mineral rights broker can help you create a strong sale and surface use agreement, ensuring you receive full value and reliable protections.

‍

What Is a Surface Use Agreement?

While the surface owner owns the rights to the surface of the land, the mineral rights, or rights to develop the actual oil and gas beneath that land, are often owned by someone else. Usually, surface rights and mineral rights are split as the result of a mineral sale or lease.

‍

As we’ve touched on above, a surface use agreement is a legally binding document that lays out specific terms and conditions on how the land can be used by mineral rights buyers and leaseholders. The intent of surface agreements is to clearly define all expected operations to prevent disputes and ensure the land is restored when development ends. If you have concerns about how mineral production could impact the ground above, you should create a plan to negotiate for strong surface protections.

‍

Typically, a surface use agreement will include the following details about your land and the mineral transaction:

• A legal description of the land
• Details on the location of facilities and pipelines
• Specifications on how the land must be restored following drilling operations
• Limitations on noise and operational impacts on nearby residences or farms
• Speed limits for vehicles on site
• Details on the scope of the oil and gas operations
• Protections from safety issues and environmental contamination

‍

From mineral leases and surface agreements to environmental and reclamation permits, mineral rights transactions and negotiations can be incredibly complex. That’s why it’s important to work with a capable mineral rights expert if you plan on selling your rights.

‍

How Can I Access Strong Surface Protections?

While some states have laws in place requiring surface agreements to be put in place, other states, such as Texas, have more limited surface protections. This means that it’s important for mineral owners to be aware of any protections that are provided in their state, as well as their options for negotiating a surface use agreement.

‍

If you plan on selling or leasing your mineral rights, a mineral rights broker can help you negotiate for a strong surface use agreement. Here at The Mineral Auction, we help property owners make the most of their mineral rights, utilizing a network of thousands of qualified buyers to access competitive offers for mineral ownership. We can help you create a strong agreement to protect your property’s surface.

‍

About the Accommodation Doctrine

Several states that have significant oil and gas development follow what’s known as the accommodation doctrine for developers. Under this legal protection, the developer must modify their operations if they impact the existing surface use. However, again, there are limits on this protection, such as cases involving reasonable development use or a lack of alternative production methods. 

‍

Different versions of this rule apply in Texas, Colorado, North Dakota, Utah, New Mexico, Arkansas, West Virginia, Wyoming, and Oklahoma, with the application and specifics varying between states.

‍

What Can I Do If an Oil and Gas Company Violates Our Surface Use Agreement?

If you sold your mineral rights or entered into an oil and gas lease, and now the mineral developer is violating your existing surface use agreement, you may have options for recovering damages. The primary methods to hold gas and oil companies accountable for surface owner protection violations are:

• Filing a Lawsuit – You can typically file a lawsuit to seek compensation if there has been a breach of contract resulting in actual losses.
• Enforcing Surface Use Clauses – Surface use agreements may include clauses specifying damages for violations, forcing violators to pay pre-agreed-upon fees.
• Court Injunctions – In some cases, you may be able to arrange for a court injunction to force the company to halt operations until the violation is addressed.
• Regulatory Complaints – Landowners may be able to report violators to state compliance and regulatory agencies.

‍

Keep in mind that most jurisdictions consider mineral rights to be dominant to surface rights. This means that if the oil company shows that their actions fall under reasonable development, then the surface owner may have limited options.

‍

Rely on an Airtight Sales Agreement From The Mineral Auction

If you’re interested in profiting from your mineral ownership, a mineral rights sale might be the right option. Through a sale, you can access a lump sum payment while simplifying your financial situation and preventing inheritance disputes. You can also see certain tax benefits from selling vs. leasing your rights. Still, selling your rights isn’t that easy, and going it alone can make it much more difficult to access the full value of your mineral rights. That’s where a mineral rights broker comes in.

‍

Here at The Mineral Auction, our mineral brokers are dedicated to helping mineral owners across the country access competitive offers on mineral estates. By putting your rights up for auction in front of our thousands of verified buyers, you can receive higher bids and better terms. We can negotiate on your behalf and ensure that all agreements and protections are properly put in place.