The following from a proposed lease is new to me. Thoughts from the experts?
“Lessee is also hereby granted the right, at any time, to amend, moify, alter or cancel said unitzation agreement as may be necessary in Lessee’s judgment to include or exclude different strata, royalty owners, or lands or such other information as is deemed necessary by Lessee.”
They want us to give permission for specific royalty owners to be excluded??
Most states regulate the units, so it can’t be entirely willy-nilly and without good reason to make a change. I know in the West (Utah, Wyoming, Montana) there is an application process, review, hearings, documentation, etc. that are required before creating or changing units. You might check with NARO and/or your local (to the location of the mineral rights) royalty owner association to help you understand that a little better for your particular scenario, or post this question to the message board here for the specific field where they are located.
Texas does not regulate units. If your minerals are pooled and then excluded from the unit so they are no longer producing, then you would want a release and should consider making certain that is addressed in the lease. The proposed clause needs to be interpreted based on all other lease language, not just as a stand-alone sentence. Consider having an attorney review the entire lease to be assured of what you are signing.
If you have not leased recently, it would be wise to get a good oil and gas attorney involved to comment on language in the lease and make the correct edits. That language is not common and is a red flag for me. Don’t know how one mineral owner would have any control over another mineral owner being excluded or not. The “unit” word definition varies by state and situation, so you need an expert to weigh in on that clause and others-especially pertaining to post production charges, etc.