A recent Surface Rights Board decision has ruled against a unilateral reduction of surface lease rentals in Alberta.
In the case, an energy company argued, “We only pay for leases with active wells on them.” The panel disagreed, saying, “Payment of compensation is not at the discretion of the operator.”
Under surface lease agreements, lessors are entitled to five-year reviews. But if the parties cannot agree, then the matter has to go to the board.
The board warned landowners this spring about the prospect of companies making unilateral decisions to cut or stop payments. A board spokesperson said negotiations must be “honest, fair, and engage both parties.”