FAQ's Search Results
Monetary compensation for surface damages is between the surface owner and the oil company. Compensation as defined by the law states:
“surface owners and their tenants are entitled to compensation from the mineral developer for: 1) loss of agricultural production and income, 2) lost land value, 3) lost use and access, or 4) lost value of improvements caused by oil and gas drilling operations that directly affect the land where said operations occur.”
Monetary compensation for the leasing of mineral rights, whether for oil, gas, coal or any other mineral of value, is between the mineral owner and the company acquiring the lease.
This information is not made public; it’s a private contract issue between the parties. Generally speaking, neighbors and friends tell each other and the going rates in specific areas become common local knowledge. But you will not find a posted price or fixed price. Each circumstance and situation is unique and treated as contractual agreement.
Once a well is determined to be uneconomic for production, the oil company is required by law to plug and abandon the well and reclaim the drill site in accordance with the requirements of the ND Industrial Commission. After this has occurred and is approved by the NDIC, the operator's bond will be released on that specific well.
Does the lease get broken? That depends. If the leased lands are only included in one spacing unit and that well is plugged and abandoned and the lease is beyond the primary term, yes. The lease is terminated and the mineral owner can lease again. However, if a lease covers multiple sections of land where the mineral owner has more than one producing well, the plugging and abandonment of one well does not have an effect on the lease if there is another producing well holding the lease. There is an exception if the lease has a “pugh clause” requiring the release of non-producing lands after the primary term.