Experienced California Oil, Gas & Real Estate Representation

Someone wants your mineral rights. Can they drill?

On Behalf of | Apr 3, 2019 | Oil And Gas Transactions |

If someone has approached you with a lease offer for the minerals or the oil on your California land, it is not unreasonable to think the person who is talking with you represents a company that excavates minerals or other natural resources. Sometimes this is the case. However, there is the chance the party you are conversing with is actually farther removed from an actual drilling operation or has no ability to drill at all.

As Mineralwise explains, the party that approaches you for mineral rights could be one of three types. As previously stated, sometimes you are contacted by a person who actually works for an excavating outfit such as an oil and gas company. For instance, a landman that is directly employed by the oil company itself might talk to you about granting the oil company a lease.

However, not all landmen are employed by an oil company. Some landmen are actually independent operators. These parties actually have no ability to drill on your land. Instead, they do their business by seeking out oil or mineral leases, and once acquired, will resell those leases to a company that can do the actual drilling. This is known as “flipping” a lease.

In lieu of a company employee or an independent party, sometimes you talk to someone who is more in the middle, a person who is an independent contractor that works on behalf of a drilling company or someone who works as part of a brokerage firm that has been hired by a drilling outfit. These individuals will be looking to secure the most favorable terms possible for their client, since they will likely benefit from the deal as well.

Depending on the party that contacts you, you may be speaking directly to the party that can start drilling on your land or someone who may pass a lease along to a drilling company at a later date. If you are confused, hiring a professional mineral rights attorney can help you negotiate a deal that is more favorable to you and prevent another party from taking advantage of you.

This article is written only to provide general information on the topic of mineral rights. It is not intended as legal counsel of any kind.