oil, gas and mineral lease terms
I am new at this and have a question. I have been offered a paid-up lease. Terms : 425/ac bonus and 21%.
Lease also wants :
"lessor.......herein grants, leases and lets exclusively unto lessee the lands subject hereto for the purpose of investigating, exploring, prospecting, drilling and mining for and producing oil, gas (including all gases, liquid hydorcarbons and their respective constituent elements) AND all other minerals, (whether or not similar to those mentioned) and the exclusive right to conduct exploration, geologic and geophysical tests and surveys, injecting gas, water and other fluids and air into subsurace strata, establishing and utilizing facilities for the DISPOSITION OF SALT WATER, laying pipelines, housing its employees and building roads, tanks, power stations, telephone lines and other structures theron to produce, save, take care of, treat, transport, and own said products, ......
Also , I am to bear 21% of costs of treating oil to render it marketable pipeline oil or, bear 21% of trucking charges. With gas, I pay 21% of cost of all compression, treating, dehydrating and transporting costs incurred in marketing the gas sold at the well.
Also has a phrase that lessee shall have free use of oil, gas and water from said land in all operations which lessee may conduct hereunder, including water injection and secondary recovery operations and the royality on oil and gas shall be computed after deducting any so used.
Also states lessee has the right and power to all or any part or formation or strata of land.
The landman states this the standard lease.
Is this standard?
Lease also wants :
"lessor.......herein grants, leases and lets exclusively unto lessee the lands subject hereto for the purpose of investigating, exploring, prospecting, drilling and mining for and producing oil, gas (including all gases, liquid hydorcarbons and their respective constituent elements) AND all other minerals, (whether or not similar to those mentioned) and the exclusive right to conduct exploration, geologic and geophysical tests and surveys, injecting gas, water and other fluids and air into subsurace strata, establishing and utilizing facilities for the DISPOSITION OF SALT WATER, laying pipelines, housing its employees and building roads, tanks, power stations, telephone lines and other structures theron to produce, save, take care of, treat, transport, and own said products, ......
Also , I am to bear 21% of costs of treating oil to render it marketable pipeline oil or, bear 21% of trucking charges. With gas, I pay 21% of cost of all compression, treating, dehydrating and transporting costs incurred in marketing the gas sold at the well.
Also has a phrase that lessee shall have free use of oil, gas and water from said land in all operations which lessee may conduct hereunder, including water injection and secondary recovery operations and the royality on oil and gas shall be computed after deducting any so used.
Also states lessee has the right and power to all or any part or formation or strata of land.
The landman states this the standard lease.
Is this standard?
Views: 141
Replies to This Discussion
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Permalink Reply by adubu on
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in the mid 80's east texas leases when back to 70 prices avg lease was $50-$75 bonus, 5 years, 1/8-1/6 royalty with terms favorable to operator not like the better terms of more informed mineral owners today at best a freestone pugh clause was added that had to to with pooling and placing all you minerals in unit or releasing at termination of lease of acres not in unit. A lot of people are sick about the terms of leases HBP from those days that is reason the TERMS OF LEASE IS THE MOST IMPORTANT part of your lease to get right before you sign and have good attorney review before signing. The attorneys fee will be return multiple times to you if deal is done right.
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Permalink Reply by Douglass Marc on
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Thanks for your replies. My property is around 10 acres, with two separate tracts. I am not sure I understand the 437 feet question, but I am bordered by massive timber lands that I am sure are all leased up. I think I will begin to ask for lease terms to see what can be negotiated. Douglass
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Permalink Reply by king john on
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douglass, be sure to check out my link on leasing checklist.see link on page before. do you know who your neighbors are leased to ? it may be worth checking into.
kj -
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Permalink Reply by intrepid on
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Douglass, with 10 ac. you probably won't have enough clout to negotiate much. Best you can hope for is to get with some adjacent owners to form a coalition of landowners to get a better deal, or just get the best deal you can and protect your land if you are living on it. Hope they do get a really good well in your unit some time after the price of gas goes back up and enjoy your checks.
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