Hydraulic Fracturing Land Lease Negotiations - Energy Company and Landowner Rights


The objective of this presentation is to provide an overview of the main issues and documents related to the challenges confronting mineral owners in the negotiation of contracts with energy companies. In addition the paper will provide a selective update of recent oil and gas case law relevant to those areas. While the focus will be contracts and disputes which arise between mineral owners and mineral developers, the objective of the paper is to provide an overview for any attorney dealing with questions in this area. The most important thing for attorneys to keep in mind is the objectives of their client with regard to the real property interests involved in light of the rights of the respective parties. On the one hand clients are interested in generating revenue from all sources, including leasing for oil, gas and mineral development, but this objective should not distract them from or adversely affect the other revenue producing activity being conducted on the property or burden the property in such a way that present and future uses are unnecessarily limited. The negotiation of any agreement should insure that if the mineral development does not unreasonably interfere with the manner in which revenues from the primary activity are presently being generated and will be generated in the future. Mineral development can be further complicated by the potential conflict in the competing objectives of multiple owners.

II. Strategy -

One should always keep in mind the needs and objectives of the primary function of the assets in question. The focus of any strategy should be the preservation and enhancement of the asset as well as the impact each use and potential use will have on the asset as a whole.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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