Seismic Testing on your Property (E2124)
How can you know if there is oil or gas beneath your property? Drilling is very expensive, so before it is undertaken, there must be a reason to believe that oil exists.
How can you know if there is oil or gas beneath your property? Drilling is very expensive, so before it is undertaken, there must be reason to believe that oil exists. To help detect oil structure, petroleum engineers have developed instruments that help geologists separate the good prospects from the poor. The most commonly used instrument is the seismograph.
Seismic methods involve creating a sound on or a few feet below the earth’s surface that sends off small vibrations directed into the earth’s depths. These are then measured as they bounce back off different layers of the earth’s structure. By measuring the amount of time that it takes for the sound waves to bounce off different structures and return to the surface, technicians determine the depth of many kinds of geological formations, including structures that may contain oil and gas.
Typically, when a seismic company wants to run a line on your property, they will send you a letter requesting your permission. Most companies use a similar letter and send two copies with an enclosed postage-paid envelope.
The company may ask to run its line on the road right-of-way in front of your property, or it may want to run a diagonal line across your property. If you agree to their request and return the signed letter, you can expect to have the line run in the near future. If you don’t return the signed letter, the company will probably follow-up with a phone call or personal visit.
In Michigan, property owners fronting on county roads generally own the land that runs to the center of the road. If you own property along a stare highway, the state probably owns the right-of-way. If you have questions about property ownership, check your deed. To give your permission, all you have to do is sign the letter and send it back. But before you sign any letter or give permission to any seismic company, consider the following key points.
1. Determine what type of line the company is running and the damage it might cause to your property. If the company runs a line on the road, it may use vibraseismic trucks that thump the land surface to make vibrations sent into the earth. However, some companies create vibrations using explosive charges placed in holes drilled in the soil. Both methods create shock waves that the company measures to determine the density and thickness of subsurface structures.
2. Once you determine the location and type of line that the company plans to run, you have a better idea of the type of damage your property may incur. Damage that might concern you could include, but is not limited to, broken tile, crop damage, disrupted fences and root damage to tree. You can request payment for these damages and should receive cash prior to allowing the company to run its line.
3. Some landowners without an oil lease request and receive a fee from the company running the seismic line on their property, even if damages are not anticipated. Their reasoning is that the seismic company has a better picture of their property as a prospective exploration site after it runs the line and analyzes the data. Armed with this knowledge, the company has a better idea of their property’s value than they do. Landowners reason that the company should pay for the privilege of gathering information from their property.
4. Many landowners allow companies to run lines without charging a fee. Others demand fees up to and even over $10 per rod (16 ½ ft.). At $10/rod, the fee is about $800 to run a line across a square 40 acre parcel.
5. If you have already leased the land on which some other company wants to run a line, review the granting clause in the first portion of your lease. It probably says that you have granted the exclusive right to explore that land to the company who holds your lease. That means you shouldn’t sign anything allowing another company to explore the land until your lease is up. The seismic company is responsible for getting permission from the company that holds your lease.
If the company that holds your lease gives another company permission to run a line on your property, you still have the right to personally negotiate and receive payment for any damages the line causes to your property. Be sure to demand cash, a certified check, a bank money order or any instrument that you can immediately deposit in your account. Some landowners in Michigan are still holding checks or site drafts that weren’t paid and probably won’t be paid even though the line was completed months ago. Many times bank drafts are never honored, and since the payment is delayed for a specified number of days, you don’t know it won’t be honored until after the line is run.
6. The amount of money that you can collect for damages or the privilege to explore your property depends on how badly the company wants to run a line and the total costs of that line to the company.
7. Consider using a signed document, like the example included in this bulletin, to specify the terms agreed upon before you let a company run its line.
In conclusion, it is to your advantage to look into the pros and cons of seismic testing before you sign an authorization allowing it. Determine what damages such activity might cause to your property. Talk to neighbors or any other landowners who have had lines run on their property or contact your local Cooperative Extension Service office, then decide what action you want to take. The goals outlined in this bulletin are not meant to stop or hamper the exploration of natural resources. They are to help protect your rights and your property.