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Subsurface Oil and Gas Leases

In Texas, land ownership can be split into two distinct sets of rights or “estates,” the surface estate and the mineral estate or subsurface estate. A company can lease the mineral estate from the land owner if the land owner also owns the mineral estate. The company is referred to as the “lessee.” Leasing of the mineral rights occurs in different ways, depending on whether the minerals are owned by private citizens, or federal or state governments. In either case, it is important to understand the owner of the minerals can be different than the owner of the lands that lie above the minerals. Leases for oil and gas mineral rights are very different from and other standard contract making the services of a qualified attorney particularly valuable when negotiating equitable agreements or resolving lease disputes.

Oil and Gas Lease Negotiations

With recent improvements in the technology used to extract energy reserves within the Barnett Shale, for example, as well as other deep shale formations in Texas, landmen representing large oil and gas companies have rushed to secure leases for oil and gas subsurface rights.

Texas landowners, farmers and ranchers know there could be value underneath their property. Whether to lease the oil and gas rights of a property can prove a difficult decision, and may be made more complicated by pressure to act quickly. Before signing a mineral rights lease or surface use agreement, it is important to have the lease or agreement reviewed by an experienced oil and gas lawyer. Not only will we make sure you have a fair, legal and binding agreement, we will also ensure the time constraints of the agreement are clear, secure the current market value for your royalties and clearly specify royalty beneficiaries.

Surface use agreements may also require an oil and gas pipeline lease, a surface site oil and gas easement and an easement to transport gas. Whatever your individual circumstances we will prepare a customized form of the agreement. You may need an agreement to perform a seismic survey in case the company request entry onto your land to do one. Further, before you allow an oil or gas company or their representatives access to your property, you will want to take legal precautions to protect your water rights. Lastly, to guard against lease disputes or breach of contract, it is vital to ensure all transactions are carried out according to Texas laws and regulations.