Texas Oil and Gas Attorney Blog
Texas oil and gas companies can engage in a variety of procedures as part of their exploratory process before they drill an oil and gas well. One such procedure is seismic testing or a seismic survey. Seismic testing is a process that results in an image of the subsurface of property. The kind of seismic testing done most often in Texas uses a “thumper truck” which contains a large plate in the center of the truck that is thumped on the ground. The shock waves emanating from the thumping result in data that can be collected digitally and result in a map of the subsurface. Seismic testing can also be done by drilling shot holes into the ground, placing dynamite into the holes and then covering the holes over. When the dynamite is set off, the sound waves from the explosions generate data that, when collected, result in a map of the subsurface.
If you own the surface and the minerals, and you have not executed an oil and gas lease for the minerals, you do not have to allow seismic testing. However, if you sign an oil and gas lease, or if you don’t own the minerals and the mineral owner has signed an oil and gas lease, many leases allow for seismic testing. Of course, if you own the minerals and are signing an oil and gas lease, it may be important to limit or eliminate any right by the lessee to do seismic testing when you are negotiating the terms of that lease.
If a seismic test is going to be performed, it’s important to educate yourself about the test. Don’t sign the permit the testing company gives you. Instead, negotiate a permit that provides protections for the property. Things to consider include (but aren’t limited to):
- Will you receive advance notice of the test?
- Is there a specific date and time set out for the test and an expiration date beyond which testing cannot occur?
- Is the area for the test specified and are activities outside that area prohibited?
- Is the activity limited to a seismic survey and no other types of operations?
- Are persons on-site limited to employees of the testing company?
- Is there an indemnity in the permit to ensure that there is compensation for any damages caused by the testing?
- Is the type of test and type of equipment to be used specified?
- Are improvements identified and located and a sufficient set back delineated in the permit?
- Is the point of ingress and egress and the route to the testing site specified?
- Is protection for trees and bushes and gates set out in detail?
- Are the requirements for insurance to be maintained by the testing company set out in detail and will you be named as an additional insured?
- If there is a mortgage lien on the property, should notice to the mortgage company be required or is it required by the loan documents?
- What are the remedies going to be if the testing company violates the terms of the permit?
These are only some of the issues that should be addressed in a seismic permit. It’s usually not a good idea to negotiate these permits yourself. Having the permit reviewed and negotiated by an experienced oil and gas attorney is generally good insurance.