What are the steps to allow rights to extraction of minerals

What are the steps to allow rights to extraction of minerals in a land in Alberta?

Solution

Steps in the allow rights to extraction :

Seismic Survey

A seismic survey provides geological information so the company can determine an area’s potential for mineral development. The company must obtain the approval of and negotiate an agreement with the landowner/renter to enter private land for a seismic survey. For Crown land, the occupant cannot deny reasonable access to the company. The exception to this is road allownaces.

Land Survey

If the geologic information looks promising for oil and gas development, the company will need to survey the land to select the location for the well site and access road. The company must make a reasonable attempt to notify you of its intent to do the land survey. You cannot deny access for land survey work related to energy activity. The company must pay for any damage done during the survey.

It is a good practice to ensure that specifics to the surveying/surveyors are in writing so both you and the crew understand your expectations. This is when you map out your negotiation position.

Initiating Negotiations

If the company wants a well site on your land, either a company or independent land agent will approach you with a proposed surface lease agreement for the well site and access road. A survey plan showing the area the company wishes to lease forms part of the agreement and must be attached to the offer. The agreement must also describe the compensation the company is prepared to pay to you.

Location Negotiation

The next step in the process is to negotiate the exact location of the well site and access road. Review the company’s survey plan to ensure that you understand the area under consideration. If the proposed location would have an unusually adverse effect on your land or land use, then you will need to try to negotiate a reasonable alternative with the company.

Usually the landowner and the company can reach an agreement on the location. Then the company can apply to the Energy Resources Conservation Board (ERCB) for a well site licence.

If you and the company cannot agree on the location, then you will need to inform the ERCB of your outstanding concerns. The ERCB will not issue a well site licence without the landowner’s approval of the location.

Well Spacing Changes

Bulletin 2006-24 of the ERCB outlined new well spacing for both gas pooling and oil pooling. The baseline densities have been increased.

Gas - Two wells per section in the Mannville Formation and four wells per section above the Mannville. Below the Mannville, one well per section is maintained.

Oil - Two wells per pool per quarter section in the Mannville Formation. For all other formations, the well density remains as one well per quarter section.

Surface Lease Negotiations

A surface lease legally secures the company’s interest in a specific piece of land for the purpose of extracting minerals. The company is not allowed on your property, except to conduct the land survey, until the lease has been negotiated, signed, and the first-year compensation paid. If the land is rented, the company must obtain the consent of both the landowner and renter.

Working Out the Details - The lease sets out the terms and conditions that will govern all future transactions between you and the company. Therefore, it is essential that the lease be as comprehensive as possible and tailored to deal with your specific circumstances.

Determining Compensation - Your negotiations will include the issue of compensation paid to you for inconvenience and losses due to the well site.