With every new lease there are always a lot of questions I have for the forum. I’m just not sure how to ask all the pertinent questions with out posting whole segments of the lease.
This lease is with Continental, it is to renew an expired lease in Garvin County, Sec 24-1N-2W. This time when I looked at the language I was suspicious of everything in the old lease. Thought to myself we did not sign a good lease then and now they what the same thing again.
We have been in negotiations for about a year and at one point I thought we had a deal for $1,500/ acre bonus at 1/4 RI and then they backed off, or at least the land person says so. Now they say, no 1/4 RI, maybe 3/16 at $900/ acre with 5 year lease. Less RI and bonus with a 3 year lease.
Seems this is in a hot area; we have had several offers to buy our interests so something is about to happen. In my last correspondence with the land person they asked me to strike out any language i did not like or send custom lease form. I could do a strike out but It would be messy and I could miss something critical because of the language.
Has anyone tried to use a sample lease from NARO, revised as needed and had it accepted by an O&G company?
Interesting. While writing this message I see another similar article for same Section. Think I will look at that while you all comment on my questions.
Thanks
Rose-Wall OK LLC
There really is no such thing as a standard lease. Each state has different laws, so leases vary by state. Almost all of the clauses are negotiable if you know enough about what they mean to get them more in the mineral owner’s favor. That is why it is important to either get an attorney to look over your lease or take enough classes with NARO or other providers in order to understand what you are signing. They can hold your family for decades. I have one that goes back to 1919!
Thanks for all your efforts to inform and guide this forum. Rose-Wall OK is especially grateful. Our holdings are mostly centered in 29 counties in Oklahoma, and a minor New Mexico holding. All are based upon inherited properties from my great uncle who was one of the original Oklahoma settlers, George L. Rose. Thus, the name of our LLC, Rose Wall OK. Unfortunately, we live in Michigan so this provokes difficulties financially for your suggested education mentions. We have both attended successfully the classes sponsored by NARO since 2008 and still have many questions about leasing. Then there are all the expenses for attending; airfare, or fuel for vehicle, hotel, etc, etc. We talking a $1000 apiece just to show up. Have they changed the format or added more information to the CMM classes?
So maybe you are right about using an attorney!
Not sure about the new tax laws, but the expenses of attending the meetings used to be able to be charged as a tax expense to the LLC (except the meals had a different rate). A good oil & gas attorney can help you with the leasing. Michigan probably has some since O&G has been going a long time there. However, they must know the laws of OK because it is an “implied covenant to market state” and the lease wording may be different than a Michigan lease or a NM lease. There are several OK attorneys listed in the Directory tab above.