What Landowners Need to Know about the North Dakota Oil Boom | O'Keeffe O'Brien Lyson Attorneys

What Landowners Need to Know about the North Dakota Oil Boom

Bakken Oil FieldNorth Dakota has made the headlines in the news in recent years due to the huge oil boom in the western part of the state. The Bakken Shale oil field in parts of North Dakota, Montana and parts of Canada is predicted to hold between 10-12 billion barrels of recoverable oil

For those living in, near or around Western North Dakota it has been a true culture change. Many worry about the safety and condition of their land, homes and communities. The best thing to do is know your rights, just in case something happens to your property.

Landowner Notification

If you are a landowner and don’t want anyone drilling on your land, you may not have that choice. In North Dakota, the law states whoever owns the mineral rights dominate over the surface owner. Your land can be developed by the mineral owner without your approval.

Although you can’t stop a mineral owner from drilling for oil on your land, you should know that before anyone can drill into your land, the mineral developer must provide at least 20 days of notice prior to starting operations. That notice must also include some form of settlement offer.

If you are not given a notice within the 20 day window, you-the surface owner-are entitled to compensation for surface damages and may even be offered punitive damages-damages awarded in a lawsuit as a punishment and example to others for malicious, evil or particularly fraudulent acts.

Negotiate an Agreement

Ideally, the surface owner and mineral developer are encouraged to reach an agreement. However, if you do not reach an agreement as to compensations, the developer can proceed with mineral development after 20 days. If unable to settle on compensation, the mineral developer and you, as a land owner , will need to litigate.

Water Damages

Everyone expects a clean and safe water supply. If your water quality is affected or your water supply is diminished due to anyone drilling for oil, you may have a case. People that are within a half a mile of a seismograph or geophysical activity or within a mile of an oil or gas well are protected by the state.

The best way to ensure you are protected from this issue is to be proactive. Those living near or around oil wells should have their water tested prior to anyone developing on their land. This gives you a baseline to compare if mineral development has truly affected your water supply.

Unwanted Visitors

Even if oil drilling isn’t happening on your property, it can still be a problem.  Is there drilling near you? There will be dust and mess, more traffic and loud noise. Unfortunately there isn’t anything you can do about that issue. However, if there are people trespassing on your land you may have a case if the trespassers do not have the mineral rights under the surface of your land.

Drilling for oil in Western North Dakota involves a lot of parties dealing with legal and business issues. It  is important to understand your rights as a mineral owner, developer or surface owner. When in doubt, it is important to seek legal advice to make the best decision for your situation.