America’s conversation place for mineral & royalty owners
A fair oil & gas lease is what most people are looking for. Whether it was a false start, the use of banned substances, or the throwing of a badminton game, the recent London Olympics reinforce our insistence on fairness. Just like in the Olympics, land and mineral owners want to be treated fairly.
One of the most common questions about oil and gas leasing is whether the offer is fair. The initial oil and gas lease offer that you receive is anything but fair to a land or mineral owner. Oil and gas leases are increasingly structured to the favor of the oil and gas company. If you are advised that the oil and gas lease you receive is fair or alright as is, then you should rethink the advice you’re receiving. Today’s oil and gas leases are anything but fair to land and mineral owners.
If you’re looking for fairness within the area being leased, do your homework. Check for fairness within an area by looking at the county pages of the Mineral Right Forum or talking to your neighbors. Check on the royalty and bonus, but also check on other terms such as the length of the lease and other concessions being offered such as Pugh clause language, warranties, or surface protections. While companies want everyone to sign the same, initial lease offer, companies routinely accept changes. Do your homework to make sure you are treated fairly.
If you’re looking for fairness, signing the initial lease offer is unlikely to achieve the fairness you’re looking for. If you want to be on an even playing field with the oil and gas company, changes to the oil and gas lease before you sign are crucial to ensure a fair lease.
Jenna H. Keller, Esq.
Attorney at Ots, Coan & Peters, LLC. (www.nocolegal.com)
Jenna H. Keller defends property rights and provides legal services to farmers, ranchers, rural property owners, and severed mineral interest owners in the areas of estate planning, natural resources (oil, gas, wind), real estate, and water.
The information in this article is for general information purposes only. This article should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article.