The long dark tea time of the split estate

 

An older couple -- freshly retired from jobs on Colorado's Californicized Front Range -- decides it's time to build a dream home somewhere on the state's less populous Western Slope. They pick a dry mesa, scrubby with sage and rabbit brush, where the views go on for miles. The neighbors graze cows. The meadowlarks sing. Saw-whet owls coo their creepy, truck-backup-beeper mating call all night in the fall. And then an oil company arrives and announces it plans to drill for natural gas from a spot on the couple's land, under which it has recently leased the federal mineral estate from the Bureau of Land Management. The couple is baffled -- they had never considered who might own the mineral rights below their land (a classic split estate), let alone that those rights might be auctioned off by the federal government without any notice.

Over the past several years this  has been a pretty common scenario for landowners in parts of the West. As most regular HCN readers know, mineral rights trump the rights of folks who own the land's surface -- they have little recourse against drilling. That part hasn't changed, but a recent article in the Oil & Gas Journal (you'll have to register to view it) suggests the playing field is leveling out just a bit a little earlier in the game. The BLM, which is in charge of federally held mineral rights, is apparently looking to make it standard agency practice to notify landowners when energy companies express interest in the federal mineral estate below their land:

"Once BLM gets the names and addresses from the party submitting the EOI (Expression of Interest), we intend to notify the surface owner of this, and send them a notice if the tract goes up for lease," said Robyn Shoop, the agency's acting senior mineral leasing specialist. . . .

"It's a courtesy on our part because the mineral estate is dominant, but it brings surface owners into the picture sooner," she said.

Shoop told the Oil & Gas Journal that the initiative has roots in the 2005 Energy Act.

Geez guys, it's about time.

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