Are you a landowner curious about the process? Read on.
The oil and gas industry is a complex industry with complex operations, and it is natural for individuals and landowners to have a number of questions. We have included below some of the most common questions we are asked. Each of these FAQs is designed to tell you, in plain language, what you need to know about seismic testing, permitting and operations.
Q: How long does it take to drill a well?
A: Most vertical wells can be drilled in a few days. Horizontal wells are more complex, and may take up to a month or more. Additionally, it may take several weeks after drilling to complete the well to the point where production can start.
Q: How noisy and/or disruptive is the process?
A: Typically, a rig runs 24 hours a day, seven days a week while the well is being drilled, and that usually continues until the desired depth is achieved. The process can be disruptive, although it is temporary. There will be noise from the equipment, light from the rig at night, and the process can be dusty or muddy. Once the drilling is done, operators will put the well into production, or plug and abandon the well if it is found to be a dry hole. Upon restoration of the location, the surrounding area is restored to a natural state.
Q: What will you do to prevent contamination of my well water during drilling?
A: The industry has gone to extensive lengths to develop technical processes to protect groundwater during the drilling process. Furthermore, states regulate these processes to ensure proper techniques practices are utilized so that there is no contamination between fresh water zones and production zones. Bottom line, production companies work very hard, and go to a lot of trouble and expense, to avoid contamination. Operators will work very hard to maintain the cleanliness and integrity of any drill site.
Q: Does drilling limit my access to my own property?
A: During the drilling process, you will probably not have access to the area where the well is located, or perhaps even the right-of-way to that location. This generally is not for an extended period of time. Other than that, there should be nothing preventing you from access to your property.
Q: What is “fracking?”
A: Hydraulic fracturing is a process used in about 90% of natural gas wells in the United States. During the process, a mixture of water, sand and certain chemicals are pumped underground to create or enhance natural fractures in the rock to help release gas or oil trapped in formations below the ground.
Q: Is fracking the same thing as drilling?
A: Hydraulic Fracturing is a well completion process, and is not a part of the drilling process.
Q: How safe – or unsafe -- is fracking?
A: Hydraulic Fracturing is a safe and effective process that has been used in the United States for more than six decades.
Q: How long does an agreement last?
A: Leases usually contain several factors and/or stipulations that affect the length of the lease. Usually, leases are for fixed periods of time designated by the lessee (for instance, five years) during time which the lessee is required to achieve a certain result (for example, drilling a well). Under certain conditions, the lessee may have the option to extend the lease. If the lessee fulfills its well obligations during the specified term, the lease will usually continue as long as there is production from the well. Wells can often produce for years or even decades.
Q: Would I be able to sell my property?
A: Yes. Property being subject to an oil & gas lease does not affect your ability to sell the property. The lease is a legal covenant attached to the land, meaning the new owners will be subject to the lease or right-of-way as if they leased it themselves.
Q: A company has asked to do seismic testing on my property. What is seismic testing, and what are the implications of my decision?
A: Companies usually conduct seismic testing in certain areas to develop more information regarding the underground formation, shale plays, thickness, depth, etc. This is usually done to help determine well pad placement and/or drilling direction for a horizontal well. In almost all cases, testing helps operators maximize the recovery of the resources to the benefits of both the operator and owner.
Q: Can a company drill on my property without obtaining a lease agreement? Can a well from a neighboring property horizontally extend or take gas from under my property without a lease?
A: A company cannot drill on your property without obtaining a lease for it. Likewise, a company cannot horizontally drill under your property without obtaining a lease for it. In some cases when there is a well near a property line, it is possible for gas to flow from one property to another when it moves from an area of greater concentration to an area of lesser concentration. States generally have minimum setbacks from boundaries and operators must adhere to those restrictions.
Q: Could a natural gas and crude oil well devalue my property?
A: Typically, a natural gas or crude oil well will not negatively impact the value of your property. To the contrary, oil and gas revenues often enhance a property’s worth.
Q: Am I allowed to use access roads constructed by the operator?
A: This depends on arrangements made with the specific operator. Some operators allow you to utilize access roads, while others discourage it.
Q: How much land is occupied or required for a drilling site?
A: The amount of land required depends on the type of well and the area. It can be as small as an acre or less, or could be larger if multiple wells are drilled from a single surface location.
Q: Is a seismic permit a contract or a lease?
A: A seismic permit is not a binding contract or an oil & gas lease. It is simply written permission that allows companies to conduct seismic testing on, across or below your property.
Q: Will the seismic permit allow a company to drill an oil & gas well on my property?
A: No, a seismic permit is simply temporary written permission from the landowner allowing seismic testing across your property. It is not an oil & gas lease agreement.
Q: How will seismic testing benefit me as a property owner?
A: Seismic testing can help discover resources that otherwise would not be discovered. This could result in monetary compensation to the land or mineral rights owner.
Q: Will this affect my farming operations?
A: Disruptions are possible, but good communication and planning can help minimize any inconvenience to the property owner. Work crews usually designate one or more representatives to work with the landowners to make the process go as smoothly as possible.