surface leases

[cowman]

Recently I have been dealing with a company for a coal bed surface lease. Never talk money with these guys until you iron out your concerns!
Anyway they wanted to do this deal where they basically have no lease...just a well head and a goat trail in? Which sounds good, right? Unfortunately when it gets wet they have a tendency to drive where ever it suits their purpose! As well as every Tom, Dick and Harry can drive all over your place!
So my first request was they fence the lease and roadway in. My second request was I do the fencing, prior to the rig moving in and maintain it...all for a price! The third request was I control the vegetation and weed control...at a set price adjusted to inflation every year. The fourth request was one hole on this lease or further compensation. All these requests are very valid and it is doubtful they could win at an arbitration hearng.
The landman tried to steer the conversation to money for the actual lease and how maybe he could give me a few extra bucks to forget about these conditions...but I wasn't going there! Once they get you to discuss money you are hooped with the arbitration board!
He said he'd have to get back to me! Hopefully I ran him off.

[cakadu]

Like you've said many times before cowman, they'll eventually get what they want.

I'll be curious to hear from you as to how it has turned out so please keep us posted. There may be some valuable things for any of us to know when approached to negotiate these leases.

[cowman]

Linda: Without a doubt they will, but like you said with the power line, the trick is to get the best deal with the best possible conditions.
I have no doubt I'll get most of my requests met. Ran them past the lawyer and he thinks no arbitration board is going to turn them down. The one hole to a site is going to be the sticker but there is precedence for it. Areas west of Edmonton are getting full compensation for every hole drilled from one site...works out to $10K rent per year on one site! They have achieved this because they have a strong surface rights group that stood up to the companies!
Our own surface rights group is just getting going and has fairly good support. Called the Pine Lake Action Group and some very good people involved including Don Bester, a consultant, director on the Butte Action Group, and a member of the group that makes recommendations to the government on surface rights.
I actually get quite a few phone calls from farmers who need some advice. I always advise them to get out and join the surface rights group but it is amazing how many don't want to make the effort to do something to educate themselves or maybe they are too cheap to pay the $50 join up fee? It is kind of funny in a way. These guys think they aren't going to get screwed by the oil company and the landman is their friend! What can you say?

[cowman]

The proposed power line is supposed to go right in front of my son's house. He bought the land and built there because of the mountain view. He is fighting it as best he can, as are many other individuals and groups across the province. There is no doubt it will devalue land wherever it is located, so it makes me wonder why it can't go out in the green zone where there aren't any people.

[silverback]

Cowman, can you expand any further on the multiple well per site payment? They have been drilling them around here but only pay around half of full value for the second hole. Anyone to talk to about this would be appreciated. Thanks.

[cowman]

silverback: Will try to check out my source on this. It was from a representative of a surface rights group west of Edmonton. He gave us this info at our surface rights group meeting.

[cowman]

The Warburg Surface Rights group has been very active for years.

[dsinclair]

We have been following the development of the CBM and sour oil drilling in a variety of areas and are very concerned about the descrepancies in 'offerings and payments' made to land owners.
There was an article about a fellow in the Western Producer a while ago. He worked and negotiated with an oil company about drilling on his land. It was interesting because they met his demands- liners on the ground to prevent contamination, etc.You might be able to gert some information there.
Norma LaFonte from Wheatland Conunty, not sure what town though, is a land man who works for the farmer in such negotiations as yours, cowman. She is a licensed landman and really knows her stuff. She would be the gal to talk to!

[dsinclair]

Thanks dsinclair for the information. In many cases landowners don't have access to specialists in negotiating leases and are no match for the oil company landmen.

[cakadu]

We got the a write-up just before Christmas from AltaLink. Their "experts" say there will be no devaluing of agricultural land, no one will shy away from buying land that has a high voltage power line on it and there will basically be no loss of use to the landowner. I for one would like to see these studies that show that there won't be any significant loss to the landowner. I would also like to see the studies that say that there won't be any harmful effects to either humans or animals from the electomagnetic output.

I hope a lot of people got their comments in on the Terms of Reference for the EIA. We're supposed to see the final product before it goes out for tender. We're also supposed to get the results of the EIA before (and I stress before) the hearings start.

Emrald - does your son get affected no matter which proposed route the line takes or just if it goes one way over the other?

I believe Norma spoke on Agri-talk with Jim Fisher in the fall and she (or whomever it actually was) gave some very good pointers as to what to look out for and how to negotiate. (I note that the show is no longer on at noon, at least in the format I was used to hearing it in, - did Jim retire?)

It would seem that cowman's advice to not talk price until everything the landowner wants is settled is the more prudent way to go.

Sad fact of the matter is, that once the EUB makes it's ruling, it is pretty much a done deal. Esthetics are not an important part of the equation and for those that bought their land because of vistas and views, well it just don't matter much when it comes to big dollars being made.

Still, one has to fight the good fight.