Freehold mineral owners generally lack the technical and legal experience needed to deal with the energy companies that lease and sometimes develop their subsurface resources.
But freeholders are not just vulnerable in their dealings with energy companies; this vulnerability extends to their dealings with industry regulators, governments and the courts.
In recent years, freeholders’ vulnerability has been exacerbated by technological changes. Advances in multi-stage hydraulic fracturing of horizontal wells has unleashed huge new supplies of gas and oil from shales – rocks previously thought to be mostly unproductive. This ‘Shale Revolution’ is largely responsible for ongoing low natural gas prices in Western Canada. Concurrently, environmental concerns have forestalled pipeline construction and negatively impacted Canadian oil prices. Low and uncertain future oil and gas prices have lead to widespread energy company insolvencies. The provincial governments of the prairie provinces have responded to these circumstances with changes to their Crown royalty regimes which minimize Crown royalties, place freehold mineral owners at a distinct competitive disadvantage and sometimes result in drainage of freeholders’ mineral rights.
Becoming a member of the Freehold Owners Association or FHOA opens up access to a wide array of information, support and services, to help freeholders understand and protect their mineral rights in these challenging times.
Freeholders are not ‘lucky’ to own subsurface oil and gas rights. Our forefathers broke the land in harsh circumstances at the turn of the 20th century and earned the right to the minerals which we have inherited.
It is time we spoke with a common voice to protect our heritage!