Oil & Gas Leases in Michigan

Many oil and gas producers have their land surveyors out looking for properties to seismically survey in Michigan now that hydraulic fracturing, otherwise known as “fracking,” has become a profitable way to extract natural gas and petroleum products from the ground.  Fracking is a process whereby hundreds of thousands of gallons, and sometimes millions of gallons, of water are injected into a well over time to fracture the rock formations underground.  In some cases, this water is aided with a small amount of chemicals to speed up the breakdown process and gather the oil and gas quicker.  This process allows the natural gas and petroleum products to seep out, which is then collected and transported off the property and refined.

Oil and gas was trapped in underground formations in Michigan a long time ago.  It is only now that the oil and gas companies have found that they can make a profit by fracking the wells to remove it.  To get access to the oil and gas under your property, the oil and gas producers hire land surveyors to go out to areas where a rock formation is known to hold oil and gas.  These surveyors ask the owners of the property for permission to survey the formation under the property to determine whether the property has access to a useful formation.  Typically, the survey is a seismic survey, but other surveys are also common.  The land survey company will have the property owner sign a document allowing it access to complete the survey, and generally, the company requests that the property owner also sign an oil and gas lease for the rights to any oil and gas found under the property at the same time.

If you have been approached by a land survey company, or an oil and gas company, for the purpose of surveying your land to determine whether oil or gas formations exist under the property, you should look for an attorney to help you review the documents, including the lease.  Oil and gas leases are enforceable documents, and you do not want to get stuck with a five or ten year contract that does not consider your best interests.  There are many issues that can arise in the use of an oil and gas lease, including the use of water, damages to the property, and payment, just to name a few.  An attorney can help you understand the lease and assist you in understanding your rights and obligations.

For more information or to speak with us about your oil and gas lease, please contact us in Ann Arbor at 734-665-4441.  To learn more about Pear Sperling Eggan & Daniels, P.C., or any of our attorneys, please visit us at www.psedlaw.com.