RANCHING Business
Protect the Herd With a Surface Use Agreement By Gilda V. Bryant
O IL AND GAS PRODUCTION OFTEN PROVIDES A MUCH-APPRE-
ciated cash fl ow into a ranching operation. Savvy ranchers protect their herds with a sur-
face use agreement (SUA) that safeguards the surface and livestock. Cattlemen may specify when and where pipeline company employees enter, how fences and slush pits are maintained and other concerns that are unique to each ranch. John F. Baum, Ph.D., consultant with the Texas
Christian University (TCU) Energy Institute, business- man, rancher and royalty owner, says that the surface owner should have an SUA to be sure the rules are clearly stated and in writing about how the oil/gas company will protect the surface and livestock. “The surface owner has to prove that the oil com-
pany was negligent,” Baum explains. “For a typical landowner it’s daunting to think about fi ling suit in a district court and hiring a good attorney to prove the oil and gas company was negligent. Many times, they don’t do it because it’s too expensive. If you have a surface use agreement the oil company has signed, then that’s much more powerful in an enforcement situation because they voluntarily agreed to be liable for damages that occur.” Everything is negotiable in a lease and an SUA. Baum
says the more leverage the surface owner has, such as owning many acres and profi table mineral holdings, the more he can ask for. However, an individual who
58 The Cattleman July 2016
owns a 10-acre tract probably will not get as many concessions from the lessee. Baum also recommends that the SUA’s language be as specifi c as possible. If the surface owner goes to court with a vague SUA, the judge will probably favor the oil/gas company.
Can and can’t do The SUA should defi ne what the lessee’s workers
can and cannot do. For example, many ranchers have profi table hunting leases. Require in the SUA that oil/ gas employees stay off the premises during prime hunting hours. Most ranchers prefer to know who enters their prop-
erty. A gate provides some protection. Adding a com- bination lock, with a limited number of people having the combination, gives the rancher some control over ingress and egress. Landowners with large cattle operations have re-
quired the oil/gas company to hire an employee to allow approved people to enter and exit the premises. In this expensive scenario, the company had to hire personnel to work 24/7. Most oil/gas companies will not pay these expenses unless it is a tremendous fi - nancial opportunity for them. The oil/gas company might consider providing sur-
veillance equipment, such as cameras or fi ngerprint readers. This more reasonably priced method of control- ling ingress and egress may be a solution the rancher
thecattlemanmagazine.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100