Landowners reminded that surface rights agreements can’t be altered by O&G companies looking to go cheap

By Medicine Hat News on August 1, 2019.

Alberta’s farmer advocate is again advising landowners that surface rights agreements cannot be unilaterally changed by oil and gas companies looking to reduce their costs.

The notice, issued this month by the office, outlines that it has received an increase in queries from farm and ranch operators who have been contacted by oil and gas firms.

The office sent out a bulletin in March 2016 regarding similar issues.

Recent letters cite low commodity prices, municipal tax burden, high operating costs and surface lease payments as a challenge, and in some cases argue changes will be invoked under clauses related to reclamation and change of use.

Such agreements can be reopen in the mid-term, but only if both parties agree, the Farm Advocate stresses. Title holders are under “no obligation to accommodate the changing financial circumstances of a company,” the bulletin states.

The Farmers Advocate also states invoking reclamation clauses could be a premature reading of the agreements, and landowners are entitled to receive payments up to the point a reclamation certificate is issues. That process takes a number of years after wells or pipelines are shut in.

More information can be obtained through the Farm Advocate’s Officer by calling the Ag Info Centre at 310-FARM or by e-mail at farmers.advocate@gov.ab.ca.

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