California Oil and Gas Law Blog

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. 

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.

In some parts of the country, blue collar workers have been hit hard by financial challenges and job losses. Some people in this position have benefited from oil and gas leases, which have helped combat these economic challenges. However, some of those who lease oil and gas rights change their minds or disagree with the way in which a project is being executed. This may be due to confusion about the terms of a lease or a property owner's refusal to abide by the terms of a lease. In some cases, this can lead to a heated dispute, which may be very hard for an oil and gas company to deal with.

If you are in the middle of a dispute over an oil and gas lease, it is crucial to do everything in your power to find a successful resolution. You may be able to resolve the disagreement outside of the courtroom, but there are times when legal action cannot be avoided. In these instances, it is imperative to carefully pore over the details of the agreement and have a firm understanding of your rights and the lease. Depending on the outcome of the dispute, this roadblock could have a major impact on future operations and the overall health of your business.

The term "mineral right" implies that one's claim to ownership extends only to the minerals found from beneath the ground of a property in California. This distinction is made due to the fact that a separate ownership category exists defining surface rights. In many agreements, the owner of a property retains the surface rights and simply sells or leases the rights to the minerals found therein to different extraction companies. Yet there are scenarios where the two terms can be blurred, thus allowing mineral rights owners to have certain surface rights, as well. 

The most obvious of these would be express rights detailed in either a sale or lease contract. Surface rights conceded by property owners typically include structure permits and extraction methodologies, as they may care less about the method through which the mineral rights owners conducts its work as they do in being compensated for the use of the land. Yet California law does indeed open the door to interpretation when it comes to additional surface rights. In defining "mineral rights," Section 883.110 of the California Civil Code states that such rights include any "express or implied appurtenant surface rights."