Four Things Every Oil and Gas Company Needs to Know About Operations and Surface Damages Issues in North Dakota
The property law principle “cuius est solum, eius est usque ad coelom et at infernos”— meaning “whoever owns the soil, it is theirs up to Heaven and down to Hell”—does not necessarily ring true in contemporary times and especially not in North Dakota. The ownership of mineral rights can be severed from the ownership of the surface estate, which is frequently the case in North Dakota. Therein lies the potential for surface owners, who generally receive little benefit from the production of oil and gas, to perceive their situation as unfair, and an increasing number of them are demanding more from oil and gas companies for using the surface.
Even though mineral estates are dominant over surface estates, some surface owners are finding favorable redress under North Dakota’s unique laws. Indeed, in late 2013 a jury in North Dakota’s federal district court awarded $1 million to surface owners for “lost use and access” stemming from the drilling and production of two wells in the Bakken, plus more than $500,000 in attorneys’ fees. Deadwood Canyon Ranch, LLP v. Fidelity Exploration & Production Co., Case No. 4:10-CV-081. Understanding the production companies’ obligations and surface owners’ rights under the Surface Damage Compensation Act has never been more important given the increase in drilling and other oil field operations in North Dakota.