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(submitted by Gem County Concerned Citizens)

SEISMIC TESTING: ISSUES FOR LANDOWNERS

It's important that landowners are aware that:

  • Seismic testing may carry physical risks (shaking of existing structures, wells, tile drain fields, shallow tree roots, etc.) as well as entail intrusion and possible damage to terrain utilized.
  • An agreement to allow seismic testing (or mineral/gas extraction) may make it difficult to sell/refinance or insure a property.  [See article "Surprises in Store for Seismic Testing Permit Signers?"]


Landowners who are unsure whether seismic or other property lease agreements will affect their mortgage or insurance coverage should consult with their bankers/agents.  (Particularly if gas/oil well drilling is to take place on the property, it would be important to learn whether any coverage is included in the insurance policy to ensure protection of their drinking water if contamination should occur.)


If you do contemplate signing a seismic testing permit, the following are factors that are worthy of consideration beforehand.

What should a landowner do when asked to sign a seismic lease?:

Here are some import steps a landowner should take upon getting a request to permit seismic testing...
[1-5 from http://www.hhmlaw.com/blog/seismic-testing-know-your-rights-around-big-bang]

1. Obtain the proposed permit documents from the contractor.
2. Ask for any agreements between the testing contractor and your lessee, and any existing agreements or documents that the testing contractor claims give it any rights to conduct testing on your property.
3. Require detailed written plans, timelines, and details of means and methods proposed for testing on your property before entering any agreement.  Some form permits give broad discretion to the testing company as to what activities they may conduct.
4. Ask for copies of insurance declarations that would protect the landownerís property and interests.
5. Be sure to obtain competent legal counsel before signing any testing access permission.
6. Do NOT sign an agreement that gives the gas company an option to lease your mineral rights.


These are lease agreements and, as with other two-party legal agreements, they are open to negotiation.  You may offer a different version or attach a list of conditions to the form presented.

For a suggested seismic testing agreement template prepared by a law firm, see: http://hhmlaw.com/sites/default/files/Seismographic%20Survey%20Permission%20and%20Agreement.pdf


Other points to consider:
[from http://www.oilandgashelp.com/blog/seismic-testing-agreements/]

1. Landowners generally get paid little for the seismic testing companies to come on-site and do their testing.
2. Landowners do not get copies of the data.
3. The data is VERY valuable.
4. The seismic testing companies may be hired by a particular gas company or they may do the work "on spec" and sell the data to any or all interested bidders.
5. There is significant risk to landowners who permit seismic testing activity before they are leased.  If the seismic data is unfavorable, the gas company may not offer a lease.  Ordinarily the gas company would have to lease, and pay a larger per-acre bonus, before they would have sufficient right to enter the property and gain access to the seismic data. 


In sum:  you donít know whatís down there.  They donít either Ė yet.  They have to pay for the right to explore.  If they can get seismic data for a few dollars an acre, they may save thousands of dollars per acre that they may have otherwise paid for the right to explore your property set forth in a lease.


Also, many landowners would not be happy to see the helicopters, trucks and ATVís show up on their property during certain times of the year (e.g. on the first day of deer season).  Be sure to talk to your lawyer about including any special protections or provisions you may require.


Some of the items that need to be considered when doing seismic testing would include the following:
[from http://www.rothmangordon.com/news/articles/marcellus-utica-and-other-shales/what-is-seismic-testing/]

  • What is your property being used for?  If there are farming, livestock or other operations going on, these must be protected.  If the property is leased, the tenantís rights need to be considered and protected.
  • Are there buildings and/or water sources on your property?  If so, setbacks will need to be established and provisions made for the protection of the buildings and water sources.
  • Will the seismic testing be done through the use of shot holes or thumper trucks?  The type of seismic testing and the location needs to be established.
  • Where is the ingress and egress to and from your property going to be?  This needs to be specified.
  • When will seismic testing occur?  A date and time need to be established.  An expiration date for the seismic testing should be specified.  You should also receive advance notice of the testing.
  • When the seismic testing is done, what repair or remediation of your property will need to be done?  The property should be returned to the condition it was in prior to the seismic testing.
  • What happens if damage or injury occurs as a result of the seismic testing?  The seismic testing company should be insured and should indemnify you against all loss or liability.  There should be an indemnification clause in your agreement with the seismic testing company.
  • What will you be paid for allowing permission to do seismic testing on your property?  Usually the amount is miniscule; i.e., $10 to $25 per acre, but it may be possible to receive more.


The bottom line is that if you are approached by a seismic testing company asking for permission to do seismic testing on your property, you should contact an attorney to review and amend the seismic testing companyís agreement, so that your rights are protected.

Possibilities for seismic testing agreement language (based on successfully negotiated leases):
[from http://pa-centrecounty.civicplus.com/DocumentCenter/View/300]

General Considerations for Every Surface Property Owner ("Grantor"):
1. Limit time to 18 months, after which permit expires.
2. Operator should agree to indemnify and hold Grantor harmless from any personal injury or property damage that may result from Operatorsí operations.
3. Surveyors shall meet with grantor(s) 48 hours to one week prior to surveying to locate springs, wells and other areas where safe distances must be established.
4. Use only grantor-designated access points.
5. Grantor to be notified prior to initial entry and subsequent entry.
6. If payment is offered, payment shall be made "prior to entry", which includes work by surveyors.
7. Property to be left in same or better condition.
8. Grantor can specify areas where no motorized vehicles are allowed.
9. No motorized vehicles permitted on ponds/ lakes/ dams.
10. No fences to be cut without prior approval.
11. Any oil spills or other hazard damage are to be promptly reported to surface owner and repaired according to existing state & federal environmental laws.
12. Any damages to property shall be repaired and/or grantor will be paid within 15 days of such damage.
13. Rutting to roads or land shall be promptly repaired back to normal conditions, excessive rutting (greater than 3" tracks) must be repaired to grantorís satisfaction.
14. Vehicles not to exceed 5 miles per hour.
15. Smaller tracts, less than 3 acres, grantor may limit access to walk only cable only.
16. No work dusk to dawn.
17. Where clearing is necessary, no trees greater than 3" diameter breast high (DBH) will be cut or damaged. Any damage will be valued by a professional forester and paid accordingly.
18. Designate areas not to be traversed with equipment (ex. deer pens, food plots, wetlands, etc.).
19. Special care must be taken in crossing creeks to not alter flow or create erosion. No large motorized vehicles shall cross creeks without adequate Erosion and Sedimentation controls.
20. Grantor is not precluded from allowing other seismic activities on his property.
21. No equipment to be parked on grantors property without permission.
22. All flagging, stakes and other debris will be promptly removed upon completion of seismic work.
23. Grantor will be supplied with map of location of all source points (vibe & explosive charges) and receiver cable lines prior to execution of seismic agreement.
24. Seismic shot holes or other seismic activity will not be permitted within 500 feet of any water well or spring used for domestic or farm water supplies.
25. Terraces, unless used for agricultural purposes, and other raised earth/rock barriers will not be crossed with motorized vehicular equipment.
26. Grantor will be contacted when activities are completed.
27. Perimeter cutting where grantorís property adjoins a route of travel (township roads, railroad right-of-way, cart ways Ė both pedestrian and vehicular) should be eliminated in order to limit unwanted ATV and pedestrian access to the property.
28. Backfilling of shot holes Ė upon detonation of explosives and collection of seismic data, shot holes are to be rendered to a condition where there is no pathway present for surface or subsurface contaminants to travel to and between water-bearing zones. To prevent runoff or other contaminants from entering the shot hole, recommend use of proper abandonment procedures specified for a water well in an unconsolidated
material.
 
Special Agricultural Considerations:
29. Crop damages shall be paid using highest yield paid in last 3 years on property and if not available, then Farm Service Agency (FSA) county average for the last 3 years will be the basis for determining payment for crop damage, payable to Grantor.
30. Seismic activity will leave gates as found. If open leave open. If closed leave closed. If locked leave locked.
31. A roundup, catch, sort and haul fee will be the responsibility of the seismic company for any animals escaping due to operators actions.
32. Seismic company must provide notification, 48 hours in advance of any phase of seismic work, to the property owner to ensure grantor or grantorís tenant has sufficient time to implement cautionary measures for the protection and safety of cattle, horses or other livestock.
33. Property owners of grazing livestock shall be give 48-hour advance notification, to permit removal of livestock from any pasture where testing is to occur. Livestock should be moved as far away as possible especially lactating dairy cattle and pregnant livestock.
34. Water resources that may feed watering troughs or similar devises may be impacted by seismic testing resulting in increased sediment or new or expanded sink holes which may impact water flow.
 

 
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