Seismic Permits and Agreements – Watch Out!!

Seismic Permits and Agreements – Watch Out!!

Oil and Gas minerals under the ground are highly valuable and highly profitable, but highly expensive to extract. Before an oil and gas company spends millions of dollars on leasing, drilling, and operating a well, the company will want to have a high degree of certainty that oil and gas are actually under the land.

Geophysical surveying, or Seismic surveying, is one way of figuring out what is under the land. Maybe you have been approached by a company asking you to sign a Seismic Agreement or Permit. If so, be very cautious with what the agreement says! There are several important considerations when executing an agreement, including:

  • Time and length of the agreement – when their crew can enter your land, and how many days or weeks they can stay.
  • What land is covered by the agreement?
  • Consideration for the agreement or permit – what are they going to pay you, and is it fair?
  • Care of your roads, fences, gates, vegetation, and livestock (if you own the surface), and Surface Damage payment in anticipation.
  • Clean up of trash and waste by the seismic crew.
  • Indemnity/Insurance – what happens if one of the crew members is injured on your land?
  • Whether you can get a copy of the seismic data.
  • And perhaps most importantly, make sure there is not an option to lease hidden within the Agreement you sign!

The Option to Lease clause inserted into many Seismic Agreements is a sneaky way for the oil company to enter into an Oil and Gas Lease on very cheap terms.

For example, hidden within a 2 or 3 page, small-print, seismic agreement, there may be a clause stating that the oil company has the option, but not the obligation, to lease your land for oil and gas development at $50.00/acre. If the seismic research is favorable, the oil company will want to drill, and you will have to accept the $50.00/acre bonus, even if other companies are paying 5 times that amount. If the seismic research is not favorable, the oil company does not have to lease or make any additional payments. It is “win-win” for them, and “lose-lose” for you.

Many times, it pays to have somebody on your side. A two-page agreement may seem simple when presented by a landman from an oil company, but that is rarely the case when you dig deeper into things. If you’ve been approached about seismic permitting, give us a call or email. We’re here to help.

Hilltop Royalties is proud to work alongside mineral owners. All of our work is done cost-free to you, and we only get paid when we strike a deal acceptable to you. It is our goal to turn the oil company’s “win-win” situation into your “win-win” situation.


Click here to read our top 10 tips for negotiating an oil and gas lease!
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To find out more:
Email us at info@hilltoproyalties.com
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Or phone us at (214) 494-1024

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