Producers have one chance to get well lease deals right

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Published: December 3, 2009

Farmers don’t get second chances when negotiating with land agents for pipelines or oil and gas wells on their land.

Unlike choosing the wrong fertilizer or buying the wrong bull, there isn’t another chance to make changes in future years, Graham Gilchrist of Alberta’s Farmers’ Advocate office told a meeting on landowner and energy issues held recently in Camrose.

“You have to get it right up front,” he said.

When dealing with oil and gas companies, he added, it’s no longer good enough for farmers to argue that they don’t want a well in a certain place without having a good reason.

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He said a real estate plan is a good place to start.

“You need evidence to make your arguments.”

Well-prepared development plans for the land will give landowners a chance to gain the upper hand in negotiations.

“You need something to present and stand up with, something more than just a plan in your head,” he said.

“The challenge to you as landowners is to create your own real estate enterprise. It’s as important as your cattle enterprise and you need to be prepared. You need evidence to make your argument.”

Linda Hunt of Ryley, Alta., came to the meeting looking for answers. She recently bought a quarter section of land with existing gas wells and pipelines and previously negotiated agreements.

“I want to know where to start and where to find out information,” she said.

By arming herself with information, Hunt said she hopes to be better able to negotiate or know what she can ask if a land agent comes calling.

“When oil and gas land men come, they say, ‘just sign here,’ and you don’t know if you’re getting a bad deal. I want to know the questions I can ask.”

Gilchrist said the Farmers Advocate office is planning another series of meetings where landowners can make real estate plans of their farms.

Using existing government rules, regulations and setback measurements, farmers can draw circles and lines on maps of the setback requirements for well sites and pipelines or draw lines around future housing, building sites, golf courses or commercial developments.

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