Compensation What do Landowners really want

[kamichel]

There are so many issues O&G companies have to deal with that it is impossibel to find out really what landowners want. I would like to start with the age old problem with compensation. Many landowners have a handle on it but many do not. How can we improve our relationship.

[coppertop]

#1. way to improve the relationship between oil companies and farmers is to treat the farmer with respect, in some cases farmer's have not had a lot of experience dealing with landmen, and I personally can tell you horror stories of experiences I have had.

When I sit down with a landman I am respectful and willing to listen to their offer, however, when I make a counter offer I do not expect to be laughed at or treated with derision. That has happened right in my own kitchen, and the last time it happened I called the company and told them to send someone else.

Farmers wish to be compensated fairly for their losses, whether it is loss of grain land, or pasture. Inconvenience may seem a minor item to an oil company, and in some cases landmen feel that farmers are WHINING, but try and run your operation around a pipeline right of way for an entire summer, or have a lease cut through the pasture and then have the company FORGET they were supposed to keep the fences in good repair around the lease.

If you are supposed to keep weeds on a lease under control DO IT, don't wait for the farmer to call a dozen times and ask that you live up to your end of the bargain, or in my case contact the county Weed Inspector and have him contact the company because they ignored my previous dozen calls !!!
Try picking up drill collars every time you worked up a field, and had calves get them around their feet. Also a real fun time around here was a well that flooded 7 acres of land for three years, high sodium water and of course fox tail all over the place. The company denied responsibility so it took the Farmer's Advocate, Alberta Environment and the local surface rights group, plus letters to two ministers to get enough attention to clean the mess up. The land is still fenced off and each year the company sends me a check for loss of use. How simple it would have been to deal with it in the first place and not wait until the government agencies forced the company to come to the table.

I am sure that there are farmers and other landowners that like to take oil companies to the cleaners if they can, but for every one of those I am sure there are dozens of other farmers with horror stories to tell about tanks leaking on their property, sump contents pumped out onto their property, and lord knows what else. Industry has cleaned up its act a lot over the past few years but there certainly needs to be more communication on both sides.

[farmers_son]

While I would commend you for taking part here I would suggest if you have to ask what landowners want then you are really not getting it.

Landowners are not some alien species. We want what everyone wants. We would want what you want. To be treated with respect, fairness, honesty.

I noticed your post in the CBM post. In that thread I mentioned my problems with seismic ruining my well. I think part of the problem with my situation is that there is too much proof seismic hurt my well and that is the most of the reason why the company is refusing to acknowledge any responsibility. The industry feels it cannot accept responsibility/blame for hurting underground aquifers when common sense suggests it must happen occasionlly.

In our area there is a gas plant that the company has constructed to look like a farm. There are false buildings surrounding the facilities and the fence is rail instead of chain link. I think that company went above and beyond to be a good neighbour. They should be commended. The EUB did not regulate that good neighbour, extra effort on the part of the company. It could be that there is too much reliance on the EUB regulations and not enough reliance on common sense when it comes to dealing with landowners.

The oil and gas sector has been too successful in keeping a lid on compensation to landowners. Pressure has been building for some time to see increases in compensation but the companies are sharing information on what is paid to landowners and no one wants to be the one to break open the pocket book. Plus the Surface Rights Board has been acting as the friend of the oil/gas sector and has become part of the problem, I think they always have been part of the problem. Compensation is going to have to increase, how much will have to determined. I am sure the oil/gas sector is all in favour of free enterprise and the marketplace but appears fearful of allowing pipeline and well site compensation to be determined by the same marketplace. Free enterprise for what you sell (oil and gas) but government control/interference for what the landowner gets paid for access to the land is a sure recipe for conflict.

[cowman]

Oilman: The compensation needs to go up a bit. It seems the oil and gas companies are usually "one step behind" on land prices.
If you want to solve most of your pipeline woes...pay an annual rent for either nuisance or adverse effect? It will cost you more but you will gain a lot more willing access. It has come to a point where this really needs to be done!
Weed control. It really doesn't do a lot of good to let a problem become a nightmare? When a farmer gets some exotic weed on a lease or pipeline, he needs it taken care of NOW...not next year or the year after when it has spread out into the field! Use effective chemicals and monitor the situation. Quite often the farmer ends up paying more to control the problem than the original price recieved for the installation!
Close the gates! Keep the fence on the lease repaired. Keep the cattle guard working! Nothing is more frustrating than chasing cattle out of the neighbors crop!
There are probably times the operator must leave the lease road? If you cut ruts out in the field or plow through hay/crop...notify the owner and pay damages!
Keep the lease site clean. Plastic blowing around, stuck on fences and trees outside the lease is not good policy.
And last...get the operator to contact the owner and see if he has any concerns. Your operator is your frontline public relations man? Educate him about how to deal with the land owner and establish a good relationship.

[coppertop]

Another way the industry can ensure a amiable working relationship with landowners is to provide landowners with CURRENT contact information for the company. Companies change hands and people leave companies. If a landowner needs to contact the company about a concern they should not have to play 20 questions with staff at the company headquarters, nor should they have to search the county tax rolls to find out who is the actual owner of the lease on their property. I have called my ONLY contact with one company and received a message that her 'mail box' was full, suffice to say that while I struggled to get a message to her I was getting more frustrated by the hour ! Oil companies may have hundreds of leases to worry about, but to the farmer, the one that is giving him trouble is the most important !

[farmers_son]

Cowman: re annual rental for pipelines costing more. When Nova started paying annual compensation for pipelines it actually saved them money. Nova paid annual rent amounting to 20% of right of way value. Instead of getting the full payment upfront the landowner got 20% per year. In effect the landowners were lending money to Nova but to the landowners 20% was pretty good interest while to Nova 20% was below their cost of capital. It was win/win. However it is still important that the right of way value the annual compensation is based upon is fair to the landowner.

Coppertop: You have highlighted a very good reason why landowners should never sign a lease or easement with the oil industry. If you were to insist on a SRB right of entry order and not sign the company's documents the SRB would keep track of all the owners and the present operator of the well/pipeline for you. Also the EUB would be able to tell you who the operator was and provide you with the contact information.

Oilman: Could you please provide some background information on yourself so we have a better idea of your relationship to the oil industry.

[coppertop]

farmers_son unfortunately many landowners have inherited leases on property when they purchased it. Many of the wells in this area are 50 years old and back then the leases weren't very sophisticated, nor were the landowners.

[coppertop]

Farmers son Background I own a CBM Company. I am only here to get a handle on what landowners concerns are because I am not really out in the front lines. The first observation I have come to is landowner first conact ie.landman ,we may have to review this and improve it. I would like to state that if we could bring togehter landowners and industry without all the regulators and governmnet being involved the results would be alot more fruitfull

[coppertop]

I doubt that will ever happen oilman !!!!

You would need to convince government to get rid of the Surface Rights Board
Land Compensation Board and the EUB, plus the Environmental Appeal Board.

[Ron]

Oilman, something that would help is if the landman knows what the drilling/pipeline company will do.
I had equipment cleaning listed on my original agreement in the land agents handwriting. He said of course everything will be washed. The drilling company didnt, I wouldnt sign a pipeline agreement untill it was agreed that ALL equipment would be washed before entering. Then the pipeline guys were pissy about the wash bill and inspecting/verifying all equipment was clean.
I understand the pipeline supervisors concern that it is a bitch to wash equipment when it is -30 BUT the landman said it would be done. That was the agreement that was put in place and I suggested that if equipment couldnt be cleaned to my satisfaction in January maybe they should come back in July when it was warm and tie in the wells at that time.
The landman can and will promise anything, who makes sure it gets done?

[jrkfarms]

Oilman, I will reiterate what others have said, RESPECT. If I as a landowner do not want oil and gas development on my land respect my wishes. Our main problem is the oil and gas industry is labelled under the public good. It may benefit the people of AB but the ultimate cost is always borne by the landowner.

[coppertop]

ron, your comments are excellent. I too, have always insisted that equipment be cleaned prior to entry, and that includes pickups. Most companies whine like crazy, cite all sorts of reasons why I shouldn't be concerned about clean equipment, etc., but when I stick to my guns ( not literally !!) they back down and comply.

In one instance when a contractor was working on a well abandonment, he took it upon himself to allow his sub contractors to move on the lease without cleaning equipment. I called the company, and the contractor was given a warning, if it happened again he lost the contract.

Some companies will do their best to work with the landowner, and like everything else the bad apples make things difficult for the rest.

[coppertop]

oilman, one key point that most of us are trying to make is that companies should respect the landowner's wishes, and it should not be necessary for the landowner to babysit the companies when they are working on his or her property. Any agreements in writing should be adhered to, if that was happening on a consistent basis it would certainly go a long way to instill trust on the part of landowners.

[coppertop]

Copertop I truly wish we could remove all the agencies you refer to it would definitely remove all the treats back and forth ie. if you don't sign we will take you(landowner) to the Surface Rights Board for force right of entry ,etc., the list of problems for both sides go on and on. I didn't mean to stir up a hornt's ness but I rather I wanted to a hands on feeling of landowners concerns. What would be helpful if during your replies to do in point blank form ie from inital contact to the final drilling operation . I have to admit that our company has not done any reclamation work as CBM is so new none of our wells have had to be reclaimed. Based on the number of issues that have come forward in such a short time please have patience and respect the fact I did not realize the resentment out there but I am in the position to take concerns back to CAPP and CSUG.Perhaps it would be advantageful to start a separate topic for each area ie Landman ,Survey, Drilling operations,Pipeline,Compenstion specific for different areas,concerns re Compressor Sites...Government Regulators or lack of... I welcome your thoughts.

[coppertop]

I must aplogies. for my spelling and typing as I have a secetary that always does my typing and I don't have much time to spend on this so read between mistakes and I did spell Coppertop wrong ,my aplogies