Has anyone successfully done this? I recently considered looking at an 85 acre property that is under production. I called the O&G company and they said they don't sell surface waivers. The seller owns 100% of the minerals, but didn't put any surface language in the lease. Just wondering if anyone has ever had success with something like this. Maybe put it in the contract that the seller is responsible to obtain this before closing? Thanks in advance.

Bonfire97 said:

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Has anyone successfully done this? I recently considered looking at an 85 acre property that is under production. I called the O&G company and they said they don't sell surface waivers. The seller owns 100% of the minerals, but didn't put any surface language in the lease. Just wondering if anyone has ever had success with something like this. Maybe put it in the contract that the seller is responsible to obtain this before closing? Thanks in advance.

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I am not sure exactly what you are describing so maybe I am wrong here. An oil and gas lease doesn't need surface language. The Mineral estate is the dominant estate so if the O&G company gets the right to drill and develop they implicitly get the right to access the surface of the property for the limited purpose of developing the minerals. The O&G company doesn't own the property they are just leasing the right to extract minerals and drill wells etc so the O&G company typically can't even provide a good waiver anyways.

A typical thing for a shrewd property owner (especially one with 100% of the minerals) is to negotiate when the lease is signed that the oil company can not use the surface of that property for the wellsite. A 100% mineral owner has the right to negotiate such terms.

This owner did not do that and now is trying to sell the property. I was just trying to understand if it is typical for an O&G company to sign those surface rights over on an active lease. Especially if they knew that the property is already pooled in to an existing well they have and would never be drilled on.

Yes, this is done from time to time. Hard to know the value/cost of getting a waiver from the oil company. Every situation is different, and it depends on alternate drilling locations in the vicinity. I recommend talking to a local oil and gas attorney to help. He/she may have connections with the oil and gas operators in the area.

Talk to a local O&G attorney. I can tell you that, while surface waivers in mineral leases are common, in my experience it's much harder to do on a tract that size. Operators are giving up a ton of flexibility when they're putting pooling units together and there's a big 85 acre tract in the middle where they can't drill. Often on properties that size or larger we opt for surface protections rather than surface waivers, meaning the surface owner gets some say in where the pad is located, prohibiting pads in certain locations, specifying surface damages, etc. You can also negotiate a surface owners' bill of rights from the seller that wouldn't cover this lease, but would be effective for any future leases. Find a good real estate attorney in the area to help you negotiate and include those items in your contract. It'll be hard to get them after the fact. As for the current lease, you'll have to try some hard negotiation with the current lessee or just live with the risk.

ETA: If it's currently under production, the current lease will be held for a while. See if the oil company will tell you if they have any current plans for future drilling in your unit. Depending on current production they may or may not be interested in drilling more. Sounds like they don't currently have any wells on the subject property, so that's a good start.

Thanks for the feedback. There were wells drilled on the opposite end of the lease block in 2024 that now have this property locked in. The one well that goes in the direction of this tract doesn't actually touch the tract, though. I did speak with the oil company and they told me there were no other plans for additional wells and actually told me the horizonal wells could have been drilled further (and through this property), but they didn't feel like it would be worth it to do so. They also mentioned something like it would be highly unlikely that they would drill another well and cross "unit lines" to get to this property since it is at the edge of the lease block, but I really didn't understand what he was saying. He was really cool about it all and talked to me for awhile. I wish the previous owners would have negotiated a surface waiver in there. I am not a risk taker, so I will be passing on the place, unfortunately.

"Crossing lines" means the O&G company would have to get a production sharing agreement signed by the mineral interest owners of multiple pooling units in order to have wells that produce from underneath land in different units. They usually want to keep wells within a single pooling unit, and getting production sharing agreements signed is a pain in the ass.