Billings Gazette Guest Opinion: Dennis Hoyem

This guest opinion appeared in the October 21, 2014 edition of the Billings Gazette:

Guest opinion: Surface owners, know your oil and gas mineral rights

If you own only surface rights and a company intends to drill a well on your land, you’ll do well to get the time of day from them. I say this as an anti-clock watcher (I’m sorry, I’m late.). Mineral rights take precedence over surface rights in Montana, and many other states — thanks to boards of oil and gas and heavily lobbied legislatures who haven’t always thought things through.

In a surface ownership-only scenario, you would obviously not be entitled to any “signing bonus” or royalties. Further, you would likely be undercompensated for surface disturbance. Worse, you would have little or no control over where the disturbance of your surface occurred; in Montana there are no required setbacks from water wells, streams, or even your home.

Picture a case where you do own the majority of oil and gas rights, and several others own much smaller individual percentages of that same mineral estate. One owning the smallest interest could give permission for total oil-gas extraction — even if everyone else were opposed to it! Uncle Pete may then no longer be everyone’s favorite uncle. Hide the musket.

Apparently, unanimity is required here to say “no,” but not to say “yes.” Would the company fairly compensate the naysayers? It’s kind of like Pete alone owned all the oil and gas. Life isn’t always fair is it?

So, it’s very important for you and me to pre-determine who all owns the minerals under our land. We can then begin conversations which may avoid family members falling out with each other. And we can make easier, quicker, and more-informed decisions when the oil company comes.

Local title companies are often very busy doing what they do best and are not interested in adding mineral/mining right searches to their job description. So, what are other options?

Although I don’t personally know any yet (the courthouse might), there are those who will provide such research service at a cost of, say, $500 per day.

Fortunately, for private and state minerals, the Montana Department of Natural Resources can help you, and your local Bureau of Land Management office can help you with federal mineral ownership.

Finally, you and I can do the research ourselves in our county’s courthouse. Most clerk and recorder offices have computers available for such use. A learning curve is unavoidable. Given that and competition for use of such computers with others researching — not just mineral rights, but many other things — don’t dally.

Dennis Hoyem of Nye spent 36 years in public service with the U.S. Coast Guard, Stillwater County Commission and federal Bureau of Land Management in Miles City where he was a surface protection specialist for oil and gas exploration and development.

Find out more
You can read more about this topic on this blog by clicking here and here.

Dennis Hoyem and his wife Cathy were interviewed for our Preserve the Beartooth Front video. Here’s that video. If you receive this via email, click on the title of the post to see the videos.

and here are outtakes from Dennis and Cathy’s interview:

About davidjkatz

The Moses family has lived on the Stillwater River since 1974, when George and Lucile Moses retired and moved to the Beehive from the Twin Cities. They’re gone now, but their four daughters (pictured at left, on the Beehive) and their families continue to spend time there, and have grown to love the area. This blog started as an email chain to keep the family informed about the threat of increased fracking activity in the area, but the desire to inform and get involved led to the creation of this blog.
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3 Responses to Billings Gazette Guest Opinion: Dennis Hoyem

  1. deborahgriffin572 says:

    Thank you, Dennis, and David for keeping these critical facts available to all. The promise of quick and easy money is rarely the case.

  2. suttondmd@netzero.com says:

    hello, don’t know if you can clarify any of the info in the post. I had a lawyer who said they were expert in this field tell me that the person who owns a majority of the rights .. I think the cut off may be around 85% has control over minor holders of subsurface rights and can overrule them if they want to drill. thanks dave

  3. davidjkatz says:

    I’m not an attorney and this law is complex, so if you know someone who is qualified to comment that would be great. However, I think the difference between what Dennis Hoyem is saying and what your attorney is saying may have to do with a phenomenon common to horizontal drilling.

    When you drill a vertical well, you are usually drilling on a single piece of surface property, and so the restrictions you describe may apply to the mineral estate linked a single surface property. However, in horizontal drilling the well can extend through several different surface estates. In that case non-participating owners can be subject to forced pooling, which is described in one of the links above. – DJK

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