First Choice Energy

Thursday, August 23, 2012

Tips on Signing an Oil & Gas Lease

From HubPages:
You have all the time in the world to work out a deal that is acceptable to both you and the oil company.
You should first consider the amount of long term revenue or oil and gas royalties that you will be paid as oil and gas is produced. You can seek a higher percentage, within reason, and even a difference of 1/16th of oil and gas royalties can mean a huge difference over the life of the well. The lease payment is an up front payment for the right to explore for oil and gas on your property. Royalty payments are from actual production should oil or gas be discovered. Make sure you negotiate for a fair share of the production. Going rates are from 1/16 to 1/4 of production.
Ask your attorney to look for, and delete the "Mother Hubbard" clause, which can give the company the right to drill on all adjacent properties you own and treat them as the same property. For example, if you own ten acres in one parcel and ten in another on the other side of the highway you want to be able to lease them separately.
Read the rest of this posting here.

Connect with us on Facebook and Twitter!

1 comment:

  1. Consider if you want to lease or sell all of the depth under your property or just a considerable extent. Also, always put into the contract how the oil company is to behave in your land. This will safeguard you from any trouble or problem that may arise in the future.

    Queenie Regner

    ReplyDelete