Real estate transactions existed solely as fee simple transfers prior to the advent of oil exploration and production. Commercial mineral production complicated property ownership, as many property owners had no interest in mining or drilling operations. Similarly, oil and gas companies may wish to acquire the rights to drill in a particular area, but have no desire to pay to lease the structures on the property’s surface. To remedy this situation, fee simple estate owners may sell mineral rights either as unknown rights, which grant ownership of all mineral commodities beneath their land, or as limited rights, which allow companies only to extract and profit from specific commodities. While states regulate the ownership and transfer of mineral rights, these regulations differ on a state-by-state basis.
Unlike the majority of nations, the United States government does not maintain ownership over the country’s mineral resources. US organizations and individuals are legally capable of extracting, owning, and selling mineral commodities found on or below the Earth’s surface, including oil and gas, without government authorization. This freedom has led to a distinction between mineral rights and surface rights. The rights to a region’s mineral resources originally belonged to the property owner, resulting in a type of real estate ownership known as a fee simple estate. The owner of a fee simple estate holds the rights to the surface, subsurface, and airspace of a property, as well as the right to transfer this ownership, individually or collectively, via lease, sale, gift, or inheritance.
Real estate transactions existed solely as fee simple transfers prior to the advent of oil exploration and production. Commercial mineral production complicated property ownership, as many property owners had no interest in mining or drilling operations. Similarly, oil and gas companies may wish to acquire the rights to drill in a particular area, but have no desire to pay to lease the structures on the property’s surface. To remedy this situation, fee simple estate owners may sell mineral rights either as unknown rights, which grant ownership of all mineral commodities beneath their land, or as limited rights, which allow companies only to extract and profit from specific commodities. While states regulate the ownership and transfer of mineral rights, these regulations differ on a state-by-state basis.
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The Offshore Technology Conference in Houston, Texas, recently brought together a number of prominent figures in the North American oil and gas industry, including government officials and business leaders. Throughout the event, participants discussed various strategies that could help to position the entire continent as a global energy leader. With the United States and Canada currently among the top-five oil producers in the world, Mexico plans to increase its production following its current energy policy reform efforts. According to Gustavo Hernandez Garcia of Petróleos Mexicanos (Pemex), Mexico must create an oil and gas business environment offering clearly stated regulations, limited political interference, and attractive contracts in order to harness the technical resources necessary for modern energy operations.
US officials such as Paula Gant, the Office of Fossil Energy’s deputy assistant secretary for oil and natural gas, posited that the North American energy sector would benefit from an increased focus on public data mapping, as well as the development of modern infrastructure and industry best practices. Attendees also identified cost-effective strategies, including the use of efficient new technologies, as key to the industry’s development. Other attendees stressed the important of collaboration between the business and regulatory sectors of the United States, Canada, and Mexico. Texas Representative Bill Flores, a member of the House Energy and Commerce Committee, also noted a lack of oil and gas industry knowledge in Congress. As a potential solution, several conference participants promoted partnerships between federal agencies and oil and gas operators to aid the development of mutually acceptable regulations. Around the world, oil and gas industry specialists have been retooling their methodologies, thanks to low crude prices during the last few years. Despite the falling cost for a barrel of oil, a wide range of technology-focused firms are enjoying considerable growth as the energy sector begins seeking out cost-saving solutions that will allow for continued profits in a new economic reality. Several companies have developed innovative products and services that promise to improve existing wells and cut rig development time.
Some of these technologies are deceptively simple, such as the Kodiak Enhanced Perforating system, a rocket-fuel powered fracking technology that enables rig owners to obtain more oil from dry shale. Other companies, like Baker Hughes, have focused on collecting huge amounts of data to identify and correct inefficiencies. New rigs still need to be built, however, and companies like WellDog Inc. and GroundMetrics Inc. have developed spectroscopy and electromagnetic technology, respectively, to help ensure that wells are dug in exactly the right spot. |
Sentry Energy ProductionAs the U.S. government and its residents attempt to become less dependent on foreign oil and gas, oil and natural gas exploration and development firm Sentry Energy Production LLC seeks out reserves in the most efficient manner. Archives
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