Business-Minded Legal Solutions

What is a surface use agreement?

Texas is a major player in oil and gas production in the United States and has been for many decades. An important part of that production involves oil and gas companies approaching landowners to harvest the deposits below the surface. These deals typically involve a lease.

While some states require the inclusion of Surface Use Agreements, Texas is not one of them. Nevertheless, the lessor and lessee often voluntarily draft agreements to show good faith between the two parties.

Issues to address

Conditions to protect the landowner and their property values include:

  • Ensure that damaged water wells are up and running again
  • Address water supply contamination caused by drilling
  • Properly plugging wells to avoid seepage
  • Filling in drill pits
  • Reseeding surface land to ensure future viability
  • Restocking livestock if the land was used for grazing
  • Compensation for lost future income due to harm caused by drilling

Meeting the conditions

The agreement must outline specific standards, whether it dictates the scope and penalties if the lessee violates the conditions. The contact will usually include the following:

  • The lessee’s rights and responsibilities
  • Plans for developing the site or other land improvements
  • Amount paid to surface owner for lease
  • Length of the lease
  • Potential water contamination issues
  • Potential land use issues
  • Worker safety and liability
  • Landowner use of leased property

Legal guidance is crucial

Real estate and business law attorneys can draft important and valuable contracts like surface use agreements. These legal professionals can review all details and terms specific to each contract to protect their client’s interests.