Oklahoma Surface Damage Payments

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US-OG-826
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This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.

Oklahoma Surface Damage Payments are compensatory payments made to landowners for any damage caused to their property during oil and gas operations. These payments are a way for operators to compensate landowners for the use of their land and any inconvenience or disturbance caused during drilling, production, or other activities related to the extraction of oil or gas. Surface damage payments in Oklahoma are typically made as part of a voluntary agreement, known as a Surface Use Agreement, between the landowner and the operator. These agreements outline the terms and conditions for the use of the surface and provide compensation to the landowner for any damages incurred. The payments are intended to cover various costs and inconveniences such as damages to land, crops, fences, roads, or other structures resulting from oil and gas operations. In Oklahoma, there are different types of surface damage payments based on the specific activity taking place on the land. Some common types include: 1. Drilling Surface Damage Payments: These payments are made to landowners when drilling activities occur on their property. Compensation may include the cost of repairing any land or property damage caused during drilling, such as access roads, soil erosion, or ground disturbance. 2. Pipeline Surface Damage Payments: When pipelines need to be installed or maintained on the land, surface damage payments are made to landowners. These payments compensate for any damages to the land or vegetation caused by pipeline construction, including trenches, access roads, and restoration of the area after completion. 3. Production Surface Damage Payments: If oil or gas production activities are carried out on the land, landowners may receive surface damage payments for any damages caused during production processes. This can include potential land subsidence, drainage issues, or any alterations made to the surface to facilitate oil and gas extraction. 4. Surface Use Agreements: These agreements govern the use of land by oil and gas operators, outlining the terms and conditions of surface damage payments, access rights, or use of water sources, among other considerations. Surface Use Agreements ensure both parties have a clear understanding of compensation terms and land use provisions. It is important for landowners in Oklahoma to negotiate surface damage payments and other terms in Surface Use Agreements carefully to ensure fair compensation and protection of their property rights.

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FAQ

As a mineral rights value rule of thumb, the 3X cash flow method is often used. To calculate mineral rights value, multiply the 12-month trailing cash flow by 3. For a property with royalty rights, a 5X multiple provides a more accurate valuation (stout.com).

On average, a single acre's mineral rights can range from as low as $200 to over $10,000+ on the high end. As you might expect, the prices will vary depending on the mineral in question, the number of wells currently drilled, the current production rate, the existence of pipeline infrastructure, and much more.

The Oklahoma Surface Damage Act guides interactions and negotiations between land surface owners and the oil companies and others who have the mineral rights. In the state, and elsewhere throughout the U.S., the owners of land parcels do not always also have ownership of what may lay below the surface.

A Pugh Clause terminates the lease as to the portions of the land that are not included in a unit if the lessee does not conduct independent operations. Therefore, the Pugh Clause requires the lessee to develop areas of the lease that are not included in a unit.

The value of mineral rights is based on what a buyer is willing to pay today for your property. Without any royalty income it comes down to what buyers think the future income might be.

In Oklahoma, there are two major categories of land rights: surface rights and mineral rights. Surface rights are rights attached to the surface of the land. With surface rights, you have access to and the ability to build or otherwise use the surface of the land. Mineral rights are sub-surface rights.

Effect of Property Taxes on Mineral Rights Oklahoma has no inheritance tax. Capital gains tax must be paid on any sale of mineral rights and income generated from royalty streams. However, if the mineral rights have not been severed from the property, the county may not charge taxes beyond property taxes.

If you collect royalty income of $100,000, you could pay $30,000+ in taxes and only keep $70,000 and it would takes years to collect. Your basis in mineral rights can affect how much tax you owe when selling mineral rights vs collecting royalties. If you inherited mineral rights, it nearly always makes sense to sell.

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by PE Pyron · 1982 · Cited by 3 — The appraisers shall then file a written report within fifteen (15) days of the date of their appointment with the clerk of the court. The report shall set ... In Oklahoma – Mineral owners must negotiate a written contract with the surface owner for the payment of any damages that may be caused by a drilling operation.Jun 13, 2015 — If the damages agreed to by the parties or awarded by the court are greater than the bond, letter of credit, cash, or certificate of deposit ... A copy of the application must be sent by regular mail to the owner of the surface of the land on which the well is to be located, and notice published in ... Before you fill out any forms, remember to be general. It is possible we may already represent your adversary (or retain the right to until you are a client). The Surface Damage Act establishes interactions and payment between surface and mineral owners for drilling operation damages. The Oklahoma Surface Damage ... Apr 6, 2013 — write a damages contract, then the operator can enter the
... Aside from its provisions for attorney fees, the Surface
. May 27, 2015 — The Surface Damage Act requires oil companies to negotiate in good faith with landowners to determine and pay for the amount of damage that will ... They shall inspect the real property and consider the surface damages which the owner has sustained or will sustain by reason of entry upon the subject land and ... D. If the damages agreed to by the parties or awarded by the court are greater than the bond, letter of credit, cash, or certificate of deposit posted, the ...

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Oklahoma Surface Damage Payments