Texas Oil and Gas Drilling Surface Use Agreements
June 15, 2018
In Texas, mineral estates are dominant over surface estates. Therefore, the owner of a mineral estate can freely use the surface estate for the exploration, development, and production of the gas and oil beneath the property. This right to use the surface estate may be exercised by a lessee who has taken a mineral lease from the mineral estate's actual owner. And because a lessee may use the surface without restoring it or paying for non-negligent damage, surface owners often acquire what is known as a surface use agreement that restricts the use of the surface or establishes damages. Below is an overview of surface use agreements in Texas.
Texas Surface Use Agreements
Surface use agreements allow landowners and lessees to reach an agreement regarding the use of a piece of property's surface during the drilling process. Such agreements are often necessary because of the damage that drilling for minerals can cause to a piece of property's surface area. Such agreements serve to prevent irreparable damage to a piece of property and obligate the lessee to a particular standard of reclamation that may include:
Filling drill pits;
Reseeding to ensure the viability of future development;
Restoring access to wells that have been damaged;
Replenishment of livestock; and
Any other issues that may harm future royalties.
There are a number of common provisions that are typically included in surface use agreements, including:
Rights of the lessee;
Responsibilities of the lessee;
Benefits allowed to the surface owner;
Plan of development;
Issues affecting water;
Issues affecting land use;
Quality of life issues;
Issues affecting the enforceability of the agreement;
How separate agreements are to be handled;
Whether installed pipelines on the property shall be buried or left above ground; and
Detailed procedures for noise abatement.
Oil and gas laws are always changing. Therefore, it’s imperative that those involved in the energy industry have reliable, experienced, and knowledgeable legal representation to help guide them through the ever-changing Texas energy landscape. In the areas of oil and gas, it’s particularly important to ensure that all contracts, including surface use agreements, are properly drafted. Oil and gas contracts are sophisticated documents, and it’s important that they be drafted in a manner that ensures the rights and responsibilities of all parties involved. At the Law Office of C. William Smalling, P.C., we are highly experienced in the drafting and review of oil and gas contracts, including surface use agreements, joint operating agreements, farm-out agreements, master service agreements, drilling contracts, licensing agreements for use of seismic or technical data, and nondisclosure agreements. If you are in need of expert oil and gas legal representation, contact us today for a consultation.