New Gas Well on my property by XTO in Texas

vpracer · Apr 10, 2015

I got home from an Easter weekend visiting family to find a letter on my front porch saying XTO is about to drill on small acre tract I own. This deal is fast tracked for some odd reason and they want to be drilling by April 24th. With the price of gas I can't imagine why they'd want to drill. There is a well in the pool already so it's not being done to keep a lease active. Of course I don't' own the mineral rights or I wouldn't be posting, I'd been on an island somewhere. We are in negotiations about what type/amount of damages they will pay me as surface owner. They are offering $1,900 an acre for land I purchased less than a year ago for almost twice that amount. I'm told by their landman that they do not negotiate on price per acre. They did offer up some small land improvements, i.e. a pond (aka a frac tank) that we both can use and it'll become mine after their gone. No roads will really be required on my property because the pad site is right on the fence line so the road will be on my neighbors property. The pad site isn't large by Texas standards at 5 acres but still, its my 5 acres and now its gone. I have a deer blind right in the middle of their proposed site and have just recently sprigged coastal all up and down the land. I've got quite a bit of money in the land between discing, liming and sprigging. I asked them to move the site under the accommodation doctrine but they declined, saying this is the only site that works. The oil and gas lease was written many years ago and basically they have all kinds of rights under it. Although as surface owner I own the groundwater, they can use all the water they want to drill. I'm talking 19 million gallons for their frac job. My neighbors are worried about having their water wells ruined by the drilling. I realize not being the mineral owner makes me subject to the whole right of access to the mineral deal but boy it sure does hurt to watch them come take my land for half of what I paid for it and I'll never be able to hunt or graze it again. The land is essentially gone for mine or my kids use. I know Texas is oil and gas country and lots of people make lots of money and that's fine but now that its on my land, its a whole different story, ha.

I was just curious if anyone has been through this type of surface right only negotiations and how did you come out in the end? I am talking to a lawyer but he's not to optimistic about my rights.

Thanks for any input.

fishheadbob · Apr 10, 2015

You're probably screwed; the phrase caveat emptor comes to mind. Where was the lawyer you used to close the original real estate deal ? This lack of mineral rights was most likely explained to you; it is common in many areas where there are substantial underground assets. If I were you I'd be hitting up some of the (anti) fracking websites that abound for residents of fracking states like yours where their problems are numerous. You might luck out and find some recourse, or at least what amount of damages they're seeing.

In 1955 the prior owners of my farm sold a right of way lease in perpetuity to a pipeline company so the transmission company and it's successors have an in perpetuity lease on a stretch 66 feet wide and 3/8ths of a mile long for the princely sum of a one shot payment of $99.00 . That wasn't much even in 1955. Obviously not the sharpest pencils in the box. The lease was drawn by the company lawyers so it's all in their favor. At least it's underground, and when the company replaces the pipeline every 25 or 30 years they pay decent damages as well as do a little work for me as long as the heavy equipment is here anyway. It was also a factor I used when negotiating for this farm.

Dr_Zinj · Apr 10, 2015

That fracking pond is going to become a toxic waste site. You won't be able to use it afterwards, it will have to be capped, sealed, and monitored for decades afterwards. Like fishheadbob says, you'd better go back and check the original real estate deal and the contract about mineral rights; although it sounds like you bought the property cheap because you (or your predecessors) had given away a heap of the value. At least up here in NH, the property I own means I own the rights clear to the center of the earth.

Sysop · Apr 10, 2015

Be cautious of how everything is worded, and consult with as many folk as you can. XTO (which is more or less another way of saying Exxon) wanted a transmission line placed under some property my mother in law owns. They hammered out their deal and work went along, the line was laid. Go forward about a year, she is served with papers stating the contractor XTO hired to install the line never was paid, and they placed mechanic's liens against the few acres of land for $15.2M...

Go forward two more years and it is still not settled...

Egon · Apr 10, 2015

Lawyer time! Make sure it's a person that deals in mineral rights and surface lease issues.

Avoid any contact the companies involved until your legal adviser is able to advise.

The land value should be based on market cost and future profits. There may be yearly rental involved??

Sysop · Apr 10, 2015

It's not the greatest of ideas to be shooting around gas well stuff. Your uses for that that land are done for... Are they going to compensate the loss of a food source?

davrow · Apr 10, 2015

I'd vote for cutting your losses - sell your property at a loss and get away from it. It will be a nightmare for years to come.

txdon · Apr 10, 2015

I hope that 5 acres is a minimal, out of the way part out of the total acreage. The mineral owners pay no property tax and usually can get full price for their land because everyone thinks they won't mess it up with a well. If people would just walk away from a no mineral rights sale these problems would go away.

C4Ranch · Apr 10, 2015

I also recommend a lawyer. Sadly it will cost you but they'll help make the best deal possible. I wouldn't believe that there is no negotiation until you talk to someone experienced in these dealings.

The best possible outcome IMO is for you to get them to agree to out the pad site somewhere else and access the minerals by directional drilling. My community has 4 active wells all directionally drilled and none are located on our property. I would try to find a lawyer who has successfully negotiated relocating pad sites or down the pad size.