I wanted to ask if anyone has seen leases like this before, where in the body of the lease the lessee shows 1/8 royalty to the lessor, but in a separate line below it is written “The 1/8 is amended to read 21%”? What does this mean?
It is okay, but it should say “everywhere that 1/8th royalty is stated, is hereby amended to read 21%”
A 1/8th royalty means a 12.5% royalty, so 21% is much better. Make sure the rest of your clauses are in your favor. If you have never leased before, post questions in the state and county where you have mineral rights and get help. Usually the first lease offered is not in your favor.
I’m grateful for response. But why didn’t lessee just say 21%, instead of amending? Also a few days after lease was signed, I saw in county records that he assigned 4% overriding interest to his family revocable trust. Does this mean that he intends to sell the lease and reserve 25% royalty-- 21% for lessor and 4% as his override? Is that a common practice for oil and gas lease brokers? .
It likely means he sold the lease and kept a 4% override. It also likely means you could have leased for 25%, sorry to say.
Thank you. I think that must be the meaning, alright.
Keep in mind that your lease may last for many decades, you will be stuck with any bad provisions. Surface owners have different terms they may want.