Whether you have recently been approached by a “landman” or are considering on your own an oil and gas lease of your property, we encourage you to take the time to examine all of the issues and options. Miller Johnson has experienced attorneys who can help you with your questions and contracts.
The landman you deal with could be an employee of an oil and gas exploration company but often is a contract leasing agent, broker, or aggregator. In some cases, the landman will represent undisclosed principals. An engaging landman will normally propose a “standard lease” for your signature while trying to convince you that it cannot be modified or altered.
It is important to have sound legal advice before entering into any binding contract. Miller Johnson attorneys who work closely in this area of practice can counsel you on how to negotiate to obtain the most financially favorable outcome for your oil, gas and mineral rights while limiting landowner liability and land disruptions and protecting the environmental integrity of your property. They have achieved successful outcomes in negotiating:
- Significantly higher lease bonuses
- Higher than the typical 1/8th royalty rate (percentage of production)
- Higher rental payments for any extension of the term provided in the lease agreement
- Limit on overly expansive descriptions of the property
- Limitations on the rights of the lessee to hold only particular depths or amounts of the leased property
- Limitations on the disruptions of the surface, including handling of waste
- The release of all lands not included in the drilling unit (if drilling occurs)
- Considerable increases in “shut-in” royalties if a well is drilled that is not producing
- Protections for the environmental aspects of the land
- Preserving the surface of the land for agriculture or other uses
- Protect water resources including wells, lakes, and streams
- Protecting groundwater resources
- Limiting landowner liability
- Broad indemnification against damage caused by the exploration company
Miller Johnson’s attorneys also have extensive experience in litigating oil & gas disputes. Our litigation clients include mineral interest owners and producers. Some of Miller Johnson’s recent representations include:
- Frontier Energy LLC v. Aurora Energy Ltd. (representing a mineral interest owner in a royalty dispute with a producer)
- Savoy Energy v. Rorke (representing a producer in a dispute with a surface owner)
- North Michigan Land & Oil v. DTE (representing a producer in a contract dispute with a utility)
- Savoy Energy v. JAF Oil & Gas (representing an operator in a dispute with a working interest owner)
Michigan’s unique geography endows us with tremendous natural resources, which we value. We also carry the responsibility to protect the environment, and no one appreciates this more than landowners. Because much of the state is still used for agriculture, Miller Johnson attorneys are well-versed with working with clients in this field.
Miller Johnson attorneys’ experience in oil, gas, and mineral leases will allow you as a landowner to continue to prize your land and protect your rights at the same time your property’s resources can reap financial gains.