By John Hayter, Broker, Ranch Marketers

When I look at surface damage agreements Permian Basin ranch owners are considering, I want to understand the ranch use as well as the paperwork. A pad location, an access road or a gate can change how a pasture works. The agreement needs to address those details before they become daily problems.

Across West Texas and Southeast New Mexico, buying the surface does not necessarily mean buying the minerals. It also does not mean every operator needs your permission before entering. Texas and New Mexico approach surface protection differently. Knowing which rules apply is part of knowing what you have.

Start with the surface and mineral ownership

A split estate ranch has separate surface and mineral ownership. A seller can create that separation by reserving minerals. In Texas, the Railroad Commission explains that minerals the seller owns generally pass with the sale unless the conveyance reserves them or limits the transfer. An earlier reservation still matters; a seller cannot convey minerals already owned by someone else. See the RRC’s Exploration and Surface Ownership FAQ.

Have an attorney and title company trace the deeds, reservations and leases rather than relying on a listing description.

Texas surface rights and voluntary agreements

Under the RRC’s Exploration and Surface Ownership FAQ, the mineral estate is dominant. A mineral lessee generally may make reasonably necessary surface use without the surface owner’s permission or payment for non-negligent damage. Negligent, unreasonable or excessive use may create liability. Deeds, leases and other applicable restrictions can change the result.

A surface use agreement Texas landowners negotiate is voluntary under that guidance. An operator is not generally required to sign one merely because the surface owner requests it. Have counsel review the existing rights before discussing new terms.

That makes the written agreement worth careful attention. Ask what it actually promises, what it leaves open and who can enforce it. A conversation about taking care of the ranch is useful, but it leaves too much room for different expectations.

The accommodation doctrine has limits

Getty Oil Co. v. Jones, 470 S.W.2d 618 (Tex. 1971), established the accommodation doctrine: mineral development must give due regard to existing surface use in the circumstances the doctrine addresses. It does not give the surface owner a general veto over drilling.

Merriman v. XTO Energy, Inc., 407 S.W.3d 244 (Tex. 2013), explains the burden. The surface owner must show that operations preclude or substantially impair an existing use and that no reasonable alternative allows that use to continue. The owner must then establish reasonable, customary, industry-accepted alternatives available to the operator that permit mineral recovery while accommodating the existing use. Mere inconvenience or reduced profitability is insufficient.

Coyote Lake Ranch, LLC v. City of Lubbock, 498 S.W.3d 53 (Tex. 2016), extended the doctrine to severed groundwater rights. That is a separate setting, not a promise that every disagreement over an oilfield road qualifies. Have an attorney evaluate the actual documents and facts.

New Mexico surface owner rights and required steps

For New Mexico surface owner rights oil and gas development raises different questions. The Surface Owners Protection Act, NMSA 1978 §§70-12-1 through -10, addresses private fee surface land and certain tenant improvements. Its compensation and reclamation duties appear in §70-12-4.

Section 70-12-5 requires at least five business days’ notice before initial nondisturbing entry and at least thirty days’ notice before entry for oil and gas operations. The latter notice includes a proposed surface use and compensation agreement.

Under §70-12-6, if no agreement is reached after the statutory thirty-day period, the operator may proceed after providing the required security. Refusing to sign does not itself prevent entry. Section 70-12-9 provides an emergency exception.

Receiving a notice is a reason to gather the documents promptly. Ask a New Mexico attorney to review the Act’s applicability, deadlines, compensation and security before responding.

State trust land and federal interests need separate review

State trust surface is a separate situation. The New Mexico State Land Office administers its leases, and 19.2.100 NMAC governs state oil and gas leasing. Have the agency and counsel identify the applicable lease, surface protections and approvals; do not assume a private surface agreement settles the state’s requirements.

Federal interests require another review. BLM’s split-estate guidance and 43 CFR 3171.19 address private surface over federal oil and gas: good-faith efforts toward a surface access agreement, a surface-owner bond if agreement fails, and provision of the surface use plan. Federal surface also requires review of the responsible agency’s approvals.

Surface damage agreements Permian Basin owners should examine

I would work through the following questions with the operator and an attorney. They are subjects to address, not assurances that any particular term or payment is required. There is no payment schedule offered here as a standard for every ranch.

Pads, roads, flowlines and facilities

Where will each pad, road, flowline, power connection and facility go? Does an attached map show the agreed footprint? What happens if the operator needs additional land or a different route later?

Ask about road width, drainage crossings, maintenance and repair after heavy hauling. Where oilfield roads ranch owners use also carry heavy trucks, identify who handles washouts and whether ranch traffic can continue during construction. Have a surveyor check the location descriptions where needed.

Say you own grazing land near Pecos and a proposed road crosses the route used to reach your working pens. That is a reason to discuss an alternate route on a map before signing, then have counsel assess the available rights.

Caliche, water and everyday ranch operations

Will the operator bring in caliche or seek to remove it from the ranch? Where would excavation occur, how would quantities be documented and what condition would be required when work ends?

What water source is proposed? Ask about written authority, measurement and effects on stock water, with a water professional reviewing technical questions. Water ownership is a separate question from the surface agreement.

Who installs and maintains gates, cattle guards and fences? How will contractors receive instructions about keeping livestock contained? Ask how livestock injury or escape claims are reported and investigated, rather than assuming every incident is covered.

What speed and dust controls will apply? Who handles complaints when traffic increases? Say you own grazing land near Hobbs and trucks begin using the same entrance as your stock trailer. A workable traffic arrangement needs an identified route, clear instructions and someone responsible for following up.

Pits, spills, restoration and reclamation

What pits or containment facilities are proposed, and what agency approvals apply? Who notifies you of a spill, secures the area and documents cleanup? Ask what records will be provided and how unresolved contamination concerns will be handled.

Texas regulatory review should include current waste rules. RRC Statewide Rule 8 is historically associated with water protection and pits, but Chapter 4, Subchapter A waste rules took effect July 1, 2025. Use current Chapter 4 requirements rather than relying on an old Rule 8 summary. Well plugging is addressed by Statewide Rule 14, 16 TAC §3.14.

Ask what interim restoration means while a well operates and what final reclamation includes when operations end. Discuss equipment removal, contouring, drainage, soil handling, reseeding and follow-up inspection. An attorney should distinguish contractual promises from regulatory duties; a range or water professional can assess whether the proposed work fits the land.

Assignment, successors and payment obligations

What happens when the operator changes? Ask counsel whether the agreement binds successors, requires notice of assignment and preserves responsibility for earlier obligations. Identify how the replacement operator will receive maps and ranch instructions.

Separate compensation already paid from amounts still due. What activity triggers another payment, and who receives it after a ranch sale? Ask about releases, damage claims and dispute procedures before accepting language that appears to settle more than the immediate disturbance.

Buying or selling a ranch with oil and gas operations

Existing operations belong in the sale discussion early. Buyers need to understand the practical footprint and the supporting documents. Sellers need an organized account of what exists, what has been promised and what remains unresolved.

Ask the title company for the instruments behind relevant exceptions, not just the exception list. Have counsel compare recorded agreements or memoranda with complete signed contracts, amendments and assignments. A short memorandum may identify an agreement without showing all its terms. Ask which documents should be recorded and whether benefits and obligations transfer to the buyer.

For general access and easement distinctions, see ranch easements explained.

What to check

Deeds, mineral reservations, leases and complete surface agreements.

Recorded memoranda, amendments, assignments and attached maps.

Existing pads, roads and facilities compared with the paperwork.

Operator identity, permit records and proposed additional disturbance.

Payments, outstanding claims, releases and reclamation obligations.

Transfer provisions and responsibilities to resolve before closing.

Ask the seller for correspondence and maintenance records. Ask the operator about planned work and the person responsible for surface matters. Compare those answers with RRC records in Texas or Oil Conservation Division permit and operator records in New Mexico. The OCD’s official website provides access to its permitting and data resources.

Put the paperwork beside the pasture

I grew up on a ranch in Fort Stockton. My work includes mineral rights and range management, and those subjects meet whenever surface use changes how a ranch functions.

As a ranch manager, I helped negotiate pipeline easements from the landowner side.

Know what you have, and tell the truth about it. That means showing a buyer the operations and agreements together, and asking questions while there is time to get useful answers.

If you are preparing to buy or sell ranch land in West Texas or Southeast New Mexico, contact Ranch Marketers. Let’s visit.

This article is for general information only and is not legal or tax advice. John Hayter is not an attorney. Consult a qualified attorney or tax professional about your situation.

Can an oil company use my ranch surface without permission in Texas?

Under the RRC’s Exploration and Surface Ownership FAQ, a mineral lessee generally may make reasonably necessary surface use without separate permission. Deed and lease provisions can affect those rights. Ask an oil and gas attorney to review the actual instruments before assuming that surface ownership allows you to approve or reject operations.

Does the accommodation doctrine let me choose the well location?

It does not give a general right to select the location. Getty Oil Co. v. Jones and Merriman v. XTO Energy require a fact-specific inquiry into existing surface use, the owner’s reasonable alternatives and available operating alternatives. Have an attorney assess the evidence; a preferred location alone does not establish an accommodation claim.

Does New Mexico require a signed surface use agreement before drilling?

The Surface Owners Protection Act requires notice and a proposed agreement, but does not make the owner’s signature an absolute condition of entry. Section 70-12-6 permits entry without agreement after the statutory period and required security. Section 70-12-9 addresses emergencies. Have New Mexico counsel review your circumstances.

How much should a surface damage agreement pay?

There is no single rate this article can responsibly supply. Ask what land and improvements are affected, how operations change ranch use, what compensation covers and what future claims a release would settle. In New Mexico, §70-12-4 addresses compensable losses. Have counsel review the proposed terms and applicable law rather than relying on another ranch’s payment.

Does a surface agreement automatically transfer when a ranch sells?

Do not assume it does. Ask an attorney to review the agreement’s assignment and successor provisions alongside the deeds, leases and recorded instruments. Identify who receives unpaid compensation and who can enforce restoration promises after closing. Give the buyer the full signed agreement and amendments; a recorded memorandum may not reveal every obligation.