The current presidential administration is making changes to a 1972 law that gave coastal states like California the right to stall or stop offshore drilling in federal waters. Governors of states up and down both coastlines contested a recent proposal to open all coastlines to offshore gas and oil drilling according to the Los Angeles Times.
Whether you are the owner of land in California or the representative of a company interested in accessing the resources that may lay below the surface of a particular piece of property, it is important for you to understand how agreements between these parties may work. When entering into any contract involving the rights to a mineral, whether rock, oil or something else, great care should be taken to identify the fine details in order to prevent future disputes.
The oil and gas industry in California are booming and is highly competitive. Interested natural gas investors are constantly scouring the industry for opportunities to capitalize on potential discovery opportunities. Investors who intend to be successful and remain in the industry as respected leaders must be strategic about delegating responsibilities and making the types of business decisions that will allow them to make competitive movements.
Ideally, the agreement between a mineral rights owner in California and an oil and gas company to drill a well should be a mutually beneficial arrangement. The oil company has the equipment and expertise necessary to reap the bounty of your estate, and you get a percentage of the profits. According to MineralWise, however, the value of your mineral rights can vary widely on the basis of several different factors, some of which you have little to no control over.
We have focused on many aspects of oil and gas disputes on this blog, such as some of the reasons why business owners find themselves in the middle of a disagreement. As the owner of an oil and gas company, you should also think of the potential consequences associated with a dispute. Aside from financial headaches, you may face serious and potentially long-term complications depending on how the dispute plays out in court. Across the state of California, it is pivotal for oil and gas company owners to be prepared for these setbacks.
If you own a piece of land in Texas and someone wants to drill for oil on your land, you may get excited about the potential income that may bring. However, before you get too excited, you need to know the rights you have to the property. In some cases, you may only have surface owner rights, which means that oil drilling may not be quite so lucrative.
You have been approached with the possibility of joining forces with another industry leader in California to arrange an oil and gas transaction that has the potential to become extremely successful. One of the first things you will be required to do is to form a contractual agreement that will detail which party will be responsible for which requirements and their subsequent outcome. Preventing contract disputes is something you must proactively be aware of in order to maintain a functional agreement.
Oil company contract service providers in California and elsewhere in the United States have had to adjust their expectations for growth, and many now struggle in the market. Nasdaq points out that those who provide support to energy companies focused on exploration and production are apparently suffering from what may be long-term issues.
As you are probably aware, the oil and gas industry can be a highly lucrative business to be involved in. As one of the many competitors in California, one of your biggest challenges will be to strategize and come up with creative ways to stay ahead of your competition. One of your options is to collaborate with other industry leaders to form a joint operating agreement. Understanding how this type of relationship functions is critical to pursuing an agreement that is rewarding, trustworthy and successful.
Recently, you have decided to explore your options with joining forces with other owners of oil and gas royalties in California. One of your options is called a joint operating agreement and if pursued the right way, could potentially result in a wildly successful outcome. At Ehrlich Pledger Law, LLP, we are experienced in providing oil and gas owners with advice regarding partnerships and contract law.