What Every Landowner In West Virginia Should Know About Surface Damage Agreements

In this article, you will discover:

• The difference between surface use and non-surface use agreements
• Damages contemplated by West Virginia Surface Damage Agreements
• How to protect your property during oil and gas development in West Virginia

What Are Surface Use And Non-Surface Use Agreements In An Oil And Gas Lease?

In an oil and gas lease, you have either a non-surface use agreement or a surface use agreement. Non-surface use means the lessee is not allowed to use the surface at all; surface use means they are allowed to use it. Unless and until a company requests to use the surface for a particular reason, you typically want to make your lease for non-surface use.

If the company is allowed to use the surface, you’ll want to negotiate that separately. You’ll typically give the company a specified amount of land to use by:

• Renting it, where they pay you an amount upfront and another amount for a specific period
• Selling it to them outright
• Granting them an easement that covers the use of the property and any damage they cause that is incidental to that use

Why Are Surface Damage Agreements Essential For Oil And Gas Leases In West Virginia?

Technically speaking, the mineral estate is dominant over the surface estate. As a strict matter of law, the right to drill for oil and gas carries with it the right to use the surface. There are some caveats to that, which is why a company will negotiate with you regarding surface use or surface damage.

What Types Of Damages Are Typically Included In West Virginia Surface Damage Agreements?

The company must pay for any damage to the surface, including damage to trees, roadways and fields. You can also stipulate that they need to restore the property to a specified condition, either the condition it was in before, or something else agreed on by the parties.

How Can Landowners Protect Their Property Value During Oil And Gas Development In West Virginia?

You want to ensure you have specified the manner of use and how the lessee must restore the property upon completion of any surface activities.

The other provision you want in your lease agreement concerns well water or any other natural resources. You want to specify that there must be testing. In the event that the lessee causes damage, they must remedy the situation by either providing an alternative source of water or compensating you with a fixed amount.

Why Is Legal Review Of Surface Damage Agreements Critical For Long-Term Landowner Protection?

In the absence of an agreement or anything precluding it, the lessee has the right to use the surface in some way, shape or form when they purchase the right to develop the minerals. Legal review protects you so you know exactly what you’re getting into from day one, and your recourse in the event the lessee fails to live up to their end of the bargain.

You either want to ensure that your lease has a non-surface use provision or that the surface use is clearly spelled out, along with the consequences and costs explained.

Notes From The Field: How Do You Educate First-Time Landowners About Their Rights Without Overwhelming Them With Legal Jargon?

We typically review any proposals made by the company and prepare an addendum, which is usually included with the lease. We take the time to review the provisions we are requesting with the client and explain them in layman’s terms. There’s some legalese in these provisions, but most of them will be applied practically by lawyers and non-lawyers, so it’s usually not a significant issue.

Still Have Questions? Ready To Get Started?

For more information on surface damage agreements in West Virginia, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling  (304) 470-2056 (Morgantown) | (304) 470-2056 (Bridgeport) today.