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California Oil and Gas Law Blog

California land opens up to oil and gas transactions

Oil and gas can offer lucrative opportunities for individuals interested in the drilling industry. Of course, it can be complicated to lease land in order to drill, and it is important that any oil and gas transactions are carried out properly. As a result, when individuals hear of land opening up for drilling, they may want to look into their options.

It was recently reported that 725,000 acres in California have been opened up for drilling. The land, which includes parts of the Central Valley and Central Coast, has been off-limits to drilling since 2013, but the Bureau of Land Management recently issued the decision to allow the leasing of plots in those areas. Though the land is open for lease, the BLM indicated that additional approval would have to be obtained before any drilling could occur.

Handling oil and gas disputes in a timely manner

When disputes arise in any industry, many different problems may surface, and this is especially true in the world of oil and gas. These disputes can become more complicated and frustrating as time passes, which is one reason why oil and gas companies faced with a dispute should try to handle these disagreements in a timely manner. Not to mention, these disagreements can be very difficult in terms of time, money and energy. Finding a favorable resolution as soon as possible is very important and can help minimize the damage of a dispute.

There are a number of ways in which oil and gas company owners may be able to resolve these disputes in a more timely fashion. For starters, if they are able to communicate with the parties involved, this can get rid of confusion and lead to a more amicable experience. Moreover, oil and gas company owners should carefully explore their rights as well as the legal strategies that may work best. Having a good understanding of which steps to take when handling a dispute, especially if it ends up in the courtroom, can expedite the process.

Innovative strategy may revolutionize oil and gas industry

With competition as pressure-filled as it is in the oil and gas industry in California, it is no wonder why many producers go to great lengths to implement innovative strategies to try to get an upper hand. One way they can do this is by developing a strong business strategy that is able to withstand the ebbs and flows of the economy without compromising key components of organizational structure. 

This is where the idea of a platform strategy comes into play, which is an innovative way to combine technology and data management to optimize the use of valuable information within the oil and gas industry. An interesting statistic for people to note is that multiple terabytes of information are generated by a single oil rig in just one day. If there was a way to condense this information and store it in one place where it could be shared amongst applicable parties, the outcome could be a compilation of data, rich with crucial information that can be used in predicting success and identifying areas of change. 

Tips for successful oil & gas lease negotiation

At its core, negotiating a California oil and gas lease is about protecting your best interests, so the more you understand about the process and your rights as an individual with mineral interests, the more favorable your lease negotiations will likely be. At Ehrlich • Pledger Law, LLP, we have considerable experience helping clients navigate complex oil and gas issues, and we have helped many of them work through complicated lease negotiations and find solutions that best accommodate their needs.

According to SmallBusiness.Chron.com, one of the first things you should do during oil and gas lease negotiations is make sure you have a solid and comprehensive understanding of everything outlined in the lease. It will generally serve you well for the lease to be highly specific in terms of what a company can extract from your land. You also need to understand exactly where and how a company plans to drill, as well as what its rights are when it comes to any water found on your land during the drilling process.

When to inspect an oil lease

At Ehrlich • Pledger Law, LLP, we understand that emotions tend to run high when oil and gas leases are involved. For prospective sellers, these contracts have the potential to represent a serious windfall. For buyers, they are a major investment. It is natural for nerves to get frayed when this much is at stake.

Nevertheless, it often takes a level head to go through gas and oil lease documents with an eye for detail. Even relatively common forms of these leases often contain — or could benefit from, for that matter — language that pertains specifically to the deal in question.

Is the U.S. in danger of oversupply?

The oil and gas industry, like many other industries in the United States, is a fine balance between production and overproduction. The risk of oversupply can affect the stability of many oil producers in California as well as across the country. With the importation of oil and gas from other countries, it is critical to keep an eye on local oil companies and how this can affect their ability to survive. 

Although the market is expected to be volatile in price and production, experts are seeing a trend that local U.S. producers will be able to overcome any challenges this may bring. A contract between the U.S., the Organization of the Petroleum Exporting Countries and Russia says that limited supplies will be sent to the U.S. from these foreign regions. This will give local industries a better chance to control prices and will reduce the threat of oversupply in the U.S. 

Supervisors allegedly taking personal profits

The California Department of Conservation’s Division of Oil, Gas and Geothermal Resources is responsible for providing the state with drilling permits, keeping the environment and economy’s best interests in mind. Yet some people believe that supervisors in these departments are looking out for their personal interests rather than those of the state and its citizens.

Consumer watch groups are pointing their fingers at certain supervisors alleging that they are taking personal profits from the issuance drilling permits. The supervisors that are in charge over the department should have a separation of interests when it comes to approving drilling permits, performing inspections with drilling companies and regulating the industry. The drilling industry, like any other industry in the U.S., must follow certain restrictions and standards. If these standards are not met, it could endanger the public and the environment for future generations. 

Protect the value of your royalties with these tips

If you are considering whether or not to sell some of your mineral royalties in California, chances are you are going to want to find a buyer who will respect the value of your assets. At Erhlich Pledger Law, LLP, we have considerable experience helping people to make strategic decisions when they are working with oil and gas transactions. 

As with anything, there are more appropriate times than others to consider selling your royalties to someone else. Deciding when to begin soliciting your royalties is a matter of how much you wish to get for them, the condition of the market, the appeal of the royalties you are selling and how willing you are to spend time finding an ideal buyer. 

How much should mineral royalties be?

The California gas and oil businesses are complex. If you own land or mineral rights, you probably work with those who hold interests or leases in the minerals, mining rights or royalties. Normally, contracts with these individuals and companies could provide consistent value to you as an owner. However, things do not always go as smoothly as intended.

Generally speaking, you can prevent many mineral disputes by establishing sound and fair contracts at the outset of a business partnership. Here is some information about establishing lasting royalty agreements, including some typical industry conventions on pricing.

Financial concerns regarding oil and gas disputes

Oil and gas disputes take place for a myriad of reasons, and our law office has provided many examples of why these disputes arise throughout our website. When an oil and gas dispute comes up, it can result in many different consequences, regardless of the reason(s) behind the dispute. Not only can a business' reputation be on the line, but stressful legal challenges may lie ahead. Moreover, the financial impact of such a dispute can be enormous, and we will examine some financial concerns associated with these disputes in this blog post.

For starters, an oil and gas dispute may result in significant legal fees and even penalties, if the outcome is unfavorable. Moreover, an oil and gas company may be hit hard when they are no longer able to move forward with a project that they were counting on. The aftermath of a bitter dispute may also generate long-term financial concerns, some of which may even threaten the future of an oil and gas company altogether. In some instances, the financial fallout of an oil and gas dispute has prompted business owners to shut down permanently.

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