Land and Mineral Owners
Western Energy Production is sensitive to the needs and concerns of its land owners and strives to have a minimal impact on the surface area of the areas that we develop. Mitigation techniques include pad drilling with multiple wells from a single pad and horizontal long reach drilling. Care is always taken to not disrupt more surface area than is needed for production and servicing of wells.
Mineral rights can be described as the unseen value associated with a tract of land. Historically, land was transferred among owners with the mineral rights co-mingled with the surface rights. As oil and gas production began in the U.S., these rights started to be viewed independently. If mineral rights are severed, i.e. the process of separating mineral rights from the surface rights, a new and separate chain of title for the minerals begins. If production is established, a portion of the value is paid via a royalty fraction (i.e. percentage) to the mineral rights owner.
Western Energy prefers to be the operator of any wells that we drill, which gives us greater control and oversight. We strive to have a synergistic relationship with the land and mineral owners whom we work with, knowing that aligned goals and best practices will aid safety, can positively impact production volumes and will maximize the return for the mineral owner, the Company and its partners.
Commonly asked questions:
- What is an oil or gas lease?
An “oil or gas lease” is an agreement that gives the right to explore for oil, gas, and sometimes other minerals and to extract them from the ground. Provisions include the granting of subsurface and surface rights in cases where the lessor is the surface owner, lease duration, extension term and royalties. Oil and gas exploration companies lease minerals for the right to explore for oil and gas and as part of the agreement, the mineral owner is paid a rental bonus and assigned a portion of the gross production, less expenses and taxes, and receives this net amount as a royalty payment.
- What is meant by Gross Acreage?
“Gross Acreage” when used with respect to acres or wells, refers to the total acres or wells in which a company, individual, trust, or foundation has an interest.
- What is meant by Net Acreage?
“Net Acreage” when used with respect to acres or wells, refers to gross acres of wells multiplied, in each case, by the percentage working interest owned by a company, individual, trust, or foundation.
- What is the definition of a royalty?
“Royalty” means an interest in an oil and gas lease that gives the owner of the interest the right to receive a portion of the production from the leased acreage (or of the proceeds of the sale of production), but generally does not require the owner to pay any portion of the costs of drilling or operating the wells on the leased acreage. Royalties may be either landowner’s royalties, which are reserved by the owner of the leased acreage at the time the lease is granted, or overriding royalties, which are usually reserved by an owner of the leasehold in connection with a transfer to a subsequent owner.