With fossil fuels currently meeting 82% of the world's energy demands, holding the title giving you the right to mine for these fuels can be lucrative. Unfortunately, being an oil or gas title holder doesn't shelter you from potential problems.
Here are 3 types of fossil fuel disputes that you should let your attorney deal with should they arise in the future.
1. Exploration Disputes
In order to mine enough fossil fuel to meet demand, title holders frequently engage in exploration activities to discover new caches of untapped fuel. When two or more title holders feel that they have a legal stake to explore a geographic location where fossil fuels might be present, the area becomes an area of mutual interest. A court must determine which title holder will ultimately be granted the right to search for fuel stores in the area.
Having a skilled attorney plead your case can be beneficial when it comes to winning disputes over an area of mutual interest.
2. Royalty Disputes
Since many fossil fuel deposits are located on private property, you will likely be required to pay the land owner a percentage of your earnings in the form of a royalty. Royalties are essentially the percentage of the profits you gain from extracting fossil fuels that you pay back to the land owner. The royalty amount is generally determined before drilling begins, and the agreement is stipulated in the land-use lease signed by both the title holder and the land owner.
If a disagreement arises regarding the royalty amount due to the land owner holding your lease, you will want to let your attorney deal directly with the land owner to avoid a potential breach of contract.
3. Anti-Indemnity Statute Violations
Most fossil fuel drilling contracts contain anti-indemnity clauses, which are statements that protect the oil and gas title holder from responsibility should excessive damage to the property (like an accidental fire or a landslide) occur where they are drilling.
Since title holders have historically held most of the bargaining power when it comes to negotiating with landowners in the eyes of the law, many of the top fossil fuel producing states have enacted statutes limiting the types of anti-indemnity clauses that can be included in contracts. Your lawyer will be able to evaluate your current contracts to ensure that you have achieved the maximum amount of protection afforded to you under these new laws.
Working with a reputable oil and gas title attorney is the best way to ensure that exploration, royalty, and anti-indemnity disputes don't disrupt your ability to exercise your right to extract fossil fuels as an oil and/or gas title holder in the future.