ExxonMobil’s Lithium Exploration: What Every Smackover Resident Should Know
In November 2023, Exxon Mobil Corporation announce it’s diving into the world of lithium by drilling its first lithium well right here in Arkansas. Exxon’s goal is to become the go-to supplier for electric vehicles by 2030.
Now, for our local businesses and residents, this raises a crucial question: What about regulations to safeguard property owners?
Rest assured — there are regulations in place. While it’s expected that the oil-turned-metal drilling giant won’t face hiccups in this new venture, it’s always a good idea to know your rights in Arkansas.
Why ExxonMobil Chose Arkanas
Arkansas is home to the Smackover Formation, a greographical formation in Arkansas with fossils dated back to the Jurassic period. Exxon recently acquired 120,000 acres in the prolific formation, which has already been known for its petroleum reserves.
But instead of oil, this move marks a strategic move into the lithium industry. The product will branded as MobilTM Lithium. .
Exxon is directing its efforts towards expediting battery-grade lithium production, aiming to contribute to the annual manufacturing of one million electric vehicles by 2030.
What Are Your Property Rights Laws?
If you live in Smackover, then you’re likely already familiar with the drilling that has been occurring in the region for the past few years.
As a refresher, let’s go over what the Arkansas Oil and Gas Commission lays out as the ground rules for mineral ownership and exploration. While the specifics can vary based on the agreement made, here’s a general breakdown of your rights as a property owner.
1. Striking a Deal
If ExxonMobil wants to dig on your land, company representatives will approach you to make a deal.
2. Sharing Your Land
Next, you’ll be asked to share your land for digging. Make sure to sset ground rules for what they can or can’t do on the surface. If you choose not to let them dig on your land, then a new deal may be proposed.
3. Understanding Terms
Most agreements span three to five years, granting ExxonMobil the liberty to explore during this period. Afterward, rights revert to landowners, but note that the setup of mining and processing facilities might extend beyond this timeframe.
4. Drilling Continuation
If ExxonMobil discovers an ideal drill site for lithium during the primary term, brace yourself for a new proposition. Given Arkansas’ recent reputation for a “lithium boom,” this seems likely.
Exxon plans to leverage drilling techniques from the oil and gas sector to access lithium-rich saltwater reservoirs situated 10,000 feet below ground.
5. Getting Your Royalties
Royalty payments take center stage. By default, it's ⅛th of the profits, but don't shy away from asking for more. If they do find lithium, you should receive a royal payment within six months.
6. Disagreement Problems
Should a disagreement arise between you and ExxonMobil, there’s still room for resolution. Remember, legal rights safeguard you against unexpected challenges. A reliable lawyer can be your ally.
Do You Have Questions or Concerns?
If you have any questions or concerns about ExxonMobil’s new venture, don’t hesitate to reach out to the team at Hickey & Hull Law Partners.
Just as Hickey & Hull Law Partners assist in custodial arrangements, we are here to provide legal support and clarity for residents navigating the complexities of this transformative energy initiative. Contact us for a free consultation, and let us be your legal partner in safeguarding your rights and interests amidst this company’s exploration. Reach out to our River Valley office at 479.434.2414 or our Northwest Arkansas office at 479.802.6560.