Seismic and Technical Data Licensing Agreements in Texas

Originally published by Environmental and Energy Law Blog.

 

Seismic surveys are used to produce detailed images of different rock types and their locations beneath the surface. These types of surveys are typically used by oil and gas companies to determine the location and size of oil and gas reservoirs. The process involves bouncing and recording sound waves off of underground rock formations. By analyzing the time that the waves take to return to the surface, surveyors are able to glean valuable information about rock types and the availability of gases or fluids underground. Below is an overview of the agreements used to facilitate this process in Texas.

Seismic Data Acquisition

Oil and gas companies typically acquire seismic data in the following ways:

• Through their own geophysical survey or seismic shoot;
• In participation with a group of other oil or gas exploration companies; or
• From its owner via purchase, license, or another arrangement.

And regardless of how this data is acquired, an important consideration is the maintenance of confidentiality. Seismic data’s value often lies in its confidentiality, and the advantage of owning it or licensing such information is diminished otherwise.

Master and Supplemental Agreements

Oil and gas exploration companies often contract with other companies to conduct work on their behalf, and this ordinarily involves the signing of:

1. A master geophysical services agreement – This type of agreement contains general terms, conditions, and a general statement of the nature of the work to be performed by the contracting company.
2. A supplemental agreement – This type of agreement addresses each survey to be conducted, including the specifics of each survey.

An important consideration that must be addressed early is whether the survey will be performed for a flat fee (“a turnkey contract”), on a day work basis, or by some other basis. Turnkey contracts in which the exploration company agrees to pay the contractor a certain rate per square mile of data tend to be the most common in situations involving the collection of seismic data.

Texas Oil and Gas Attorney

Oil and gas laws are always changing. Therefore, it’s imperative that those involved in the energy industry have reliable, experienced, and knowledgeable legal representation to help guide them through the ever-changing energy landscape. In the areas of oil and gas, it’s particularly important to ensure that all contracts are properly drafted. Oil and gas contracts are sophisticated documents, and it’s important that they be drafted in a manner that ensures the rights and responsibilities of all parties involved. At the Law Office of C. William Smalling, P.C., we are highly experienced in the drafting and review of such contracts, including joint operating agreements, farm-out agreements, master service agreements, drilling contracts, licensing agreements for use of seismic or technical data, and nondisclosure agreements. If you are in need of expert oil and gas legal representation, contact us today for a consultation.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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