How Much Money Should a Surface Owner Get from the Driller For Placing a Well Site and Access Road on the Surface Owner's Land?

This is one of the most frequently asked questions that people have when they call WVSORO. 

Introduction.

Note that there are three ways for the surface owner to get damages from the driller. 

1.  First damages can be agreed to and paid as part of an agreement negotiated with the driller before the well is drilled.  This usually also involves a "waiver" or "statement of no objection" to the permit that includes the surface owner consenting to the locations of the well site and access road.  Of course how much a surface owner gets in such negotiations often depends on how much they could get in the next two ways.  (And always be sure that anything you sign that agrees to a dollar amount of damages before the well is drilled states that the dollar figure "only for foreseen" damages or does not include damages for "negligence, failure to perform workman like quality" or does "not include damages for doing more than is fairly necessary".  Otherwise you will not be able to get additional damages if an explosion and fire burns your house, or the driller's contractor goes wild with the bulldozer, or a land slip ends up in your pond etc.)

2.  The second way to get damages occurs after the drilling is done.  The driller gives the surface owner a notice that reclamation has begun and the surface owner can begin a statutory arbitration process.  This process is explained in The West Virginia Surface Owner's Guide to Oil and Gas. Our web site has a quick summary of that Guide. 

While this arbitration process is designed to work without you having to hire a lawyer, we suggest you at least pay for an hour of a lawyer's time to help you understand how to prove your damages. 

Unfortunately your damages under the statutory arbitration process are limited.  You only get compensated for the land taken at its current use value (as a meadow for example) and not its market value (which would be more than its meadow value if it is a good future home site).  And you do not get compensated for the reduction in value of the land surrounding the land actually taken by the driller that is caused by having a well site nearby.  You do get compensated for your lost crops etc. (be sure to have the timber appraised by a forester before they cut the timber if possible).

3.  Finally, also after the well is drilled, you can sue in court if you think that the driller has done more than is "fairly necessary" to drill the well without properly "accommodating" or giving "due regard" to your use.  If you hire a lawyer, the lawyer can use theories for claims for damages that allow you to get more kinds of damages than arbitration allows.  In particular, if the original separation of owners of the minerals from the ownership of the surface was many years ago, and/or if the well site is one of the new large Marcellus Shale well sites, then the law suit can claim that the damage done by modern drilling was not "in the contemplation of the parties" at the time of the separation of ownership, etc.  (We have a way for lawyers to get more information about possible theories of claims for bringing such a suit on our website.)

Unfortunately, although the damages you could get in such a suit may seem large to you, the amount of damages is usually not large enough to have enough monetary value for a lawyer to take your case on a "contingent fee" basis.  A “contingent fee” is when the lawyer takes his or her pay as a % of your winnings.  If the lawyer will not take your case on a contingent fee basis, you will have to pay your lawyer several thousand dollars up front to take your case.  If you can afford that we encourage that -- and let us know what happens.  If there was significant unnecessary timber cutting there can be triple damages so a lawyer might take a contingency case in that circumstance, and there are double damages for just trespass where he did not need to go.  And the size of these new Marcellus Shale wells could make it large enough for some lawyers. 

You can sue yourself in Magistrate Court, but you can only sue for $5,000 dollars there.  But if that is your only option, it is $5,000 you might not be able to get any other way.

What dollar amount can I get on my own?

We assume that if you are reading this, you are interested in negotiating or proceeding somehow on your own and you want to know what you could get in the statutory arbitration process.

In order to find a good answer to what you should settle for, we have tried informal surveys of surface owners who have had wells drilled on them.  But those results are not useful.  Many are simply fast-talked into agreeing, before drilling began, to way too little because they did not really understand what they were signing or what was going/going to go on.  We found others who got more money in an up-front agreement but, particularly in the era of Marcellus Shale wells, realized after the drilling was done that they had agreed to too little.  Others decided to wait for the statutory arbitration, but the reclamation notice form they received did not adequately inform them that it was time to start the process and that it was up to them to start the process, and so they never received anything.  Some of those who did not agree to an amount up front were so distraught by the drilling of the well on their land that they wanted to avoid ever having to think about it again for any amount of money, so they did not pursue the money.  Others who did not agree to an amount up front gave up and did not pursue arbitration figuring from their complete lack of power in the siting and drilling of the well that the company had such an upper hand that the statutory arbitration process would not turn out to be worth their time.  We were not surprised that the statutory arbitration process was not used much, but we were surprised to learn that we could not find a case where it had been used -- ever.  So one of our members is trying it with very unsatisfying progress occurring.  All the more reason to help us pass the West Virginia Surface Owners Bill of Rights.