i recenty recieved a lease for property in cheyene and kiowa co. in colorado. some one told me that the leasing co. should have separate leases for oil and gas etc.is this so?
Ms. Shaw, I recommend that you have seperate leases. The reason to have seperate leases is because it acts as a pugh clause, if each parcel/well spacing is leased seperately it becomes less likely that that all the mineral acres you own will be tied up by one well. Well crafted language in a lease or in your exibit appended to the lease could give the same benefit, but physical seperation is a good thing. A sign on a fuel storage tank that says no smoking within 50 feet is good, but having a fence around it to make sure people stay 50 feet away is better. The seperate lease is the fence. It's still possible that someone could jump the fence, and there could be language in a lease so that your acres wherever situated would be held, so be on the lookout for such. I think it's better to have a fence than not. If a landman complains that it's more expensive to record seperate leases, I would tell them I would pay for the recording of one page memorandums of lease, as the cost compared to the protection would be minimal.
Kathryn, the general concept is that separate lease documents for each tract give you the best protection from a non-producing tract being HBP. A well that's producing on Tract A will make that tract HBP or held by production. You don't want to end up with your Tract A and your Tract B both HBP by a well on Tract A. A Pugh clause deals with this protection, but sometimes is not sufficient due to technicalities or whatever. The lease itself can have language that it is to be considered as a separate lease document as to each tract (this is just a rough paraphrase). But if the lessee is willing to fiddle with separate documents for each tract, that is the best protection of all. If your parcels are in separate counties, I would use a separate lease for each county. Then the next factor would be to look at the tract size within each of those counties. ---------If you are asking whether you should have a separate document for oil and gas versus other minerals, the answer is yes. Your oil and gas lease can allow production of oil and gas and related hydrocarbons, but should not allow production of other minerals that might be found.-----[Caveat: I don't know anything about Colorado.]
Kathryn:
Good advice from the previous posts but remember, you might have to play hardball on the negotiations as the more restrictions you add, most likely the other party will begin to lessen your bonus money and your % royalty. I have found this to be the case in my past dealings so you might want to market your minerals to some extent if this is the case. Remember, don't be in a hurrry to sign anything as this will be your first mistake.
Kathryn,
I own minerals in Colorado and the previous owner was convinced into signing a lease by Diamond Operating that contained many sections and for years now they have all been held by one small producing well. They and others lost millions because they have been unable to lease these sections that Diamond say are held by that one well even if they don't get paid anything. Diamond says that everyone else are crooks when asked about it. Oil companies will take advantage of you if you let them.
Kathryn,
All good advice about protecting your future rights to production with multiple leases however, since you are the surface owner, and living out of state you may have the surface leased, and since water is lifes blood in your area, your biggest problem may be in the language of the oil and gas lease as it has to do with water rights given to the oil and gas lessee. East of the Colorado mountains, water is much more precious than oil or gas exploration and it can only belong to the surface owner. I always exclude water rights from oil and gas leases where my client is also the surface owner.
I just received documents from an oil company requesting me to lease my land in Tyler Texas 81.9 acres, but noticed they only want to pay me 200 per acre per year for 3 years with only paying 1/5 loyalty they also want me to sign and get signed by a notary republic I live in Michigan and the property is in Texas , do I sign these papers
Delores,
Do you possibly know the Abstract # of the property in question? Lets check the area of your minerals and see if there is any activity or production of oil/gas in the area. Sometimes that makes a difference on whether you sign the lease or negotiate for more bonus money and a higher percentage of royalty.
Let us know the Abstract # and lets go from there by checking the Texas Railroad Commission GIS(Geographic Information System)map
Clint Liles
Delores Moore said:
I just received documents from an oil company requesting me to lease my land in Tyler Texas 81.9 acres, but noticed they only want to pay me 200 per acre per year for 3 years with only paying 1/5 loyalty they also want me to sign and get signed by a notary republic I live in Michigan and the property is in Texas , do I sign these papers
A-802 Tyler county Texas beginning at point located in the second most western northwest corner of the tract herein west line does not have the abstract # is it possible to fax or email a copy for review I do not understand a lot that is spelled out the company want to lease is MAGNUM producing L.P A-802 Sarah fields survey ,Tyler county TX457-117-S Exhibit B-10
Delores,
I suggest that you contact a Texas landman or oil and gas attorney for guidance and to review the oil company's lease. It will be worth your time and money to be protected. Leasing your land is not a do-it-yourself project. Take it from someone whose family was in litigation with an oil and gas company after production was established and who spent a lot of money getting a resolution.
Please friend me and I will send you the contact information of a professional mineral manager who can assist you. (He assisted me in getting my minerals leased last year.)
Delores,
If you would like to join the Tyler County Texas Group click on this link:
http://www.mineralrightsforum.com/group/tyler-county-tx-oil-gas
The A-802 you mentioned in your post is the Abstract #.
Clint Liles
Delores Moore said:
A-802 Tyler county Texas beginning at point located in the second most western northwest corner of the tract herein west line does not have the abstract # is it possible to fax or email a copy for review I do not understand a lot that is spelled out the company want to lease is MAGNUM producing L.P
A-802 Sarah fields survey ,Tyler county TX457-117-S Exhibit B-10
Delores,
In A-802 Mrs. S Fields Survey I see 1 plugged gas well and 1 plugged oil well. And numerous oil /gas wells surrounding your A-802. Am enclosing a GIS map of A-802 and surrounding area of Tyler County Texas. Good luck on a lease. If you need help with the leasing I recommend Mr Wade Caldwell(oil/gas attorney). He is also a member of the Tyler County Group.
Clint Liles
Clint Liles said:
Delores,
If you would like to join the Tyler County Texas Group click on this link:
http://www.mineralrightsforum.com/group/tyler-county-tx-oil-gas
The A-802 you mentioned in your post is the Abstract #.
Clint Liles
Delores Moore said:A-802 Tyler county Texas beginning at point located in the second most western northwest corner of the tract herein west line does not have the abstract # is it possible to fax or email a copy for review I do not understand a lot that is spelled out the company want to lease is MAGNUM producing L.P
A-802 Sarah fields survey ,Tyler county TX457-117-S Exhibit B-10
Delores,
Tyler County, Texas is fairly active as far as drilling is concerned. 28 permits were approved from Jan. 1, 2013 through Jan. 23, 2014. 21 of those approved permits were for new wells to be drilled and 7 were for recompletions. I noticed on the GIS map there were several producing oil wells west approx. 1 mile from your A-802 and several producing gas well northeast approx.1 mile of your minerals. This link will show the 28 approved permits. Just click on the Lease Name to view the permit. It will tell you who the operator/oil company is and other info.
(3 pages)
http://webapps2.rrc.state.tx.us/EWA/drillingPermitsQueryAction.do?p...
Clint Liles