Lease language

I wonder if anyone has any lease language for these items that basically says:

1. Operator must timely drill additional wells; otherwise, the acreage not drilled is released.

2. Operator must produce any well capable of producing - in other words the operator cannot refuse to produce well(s) to blackmail the royalty owner and use held by production to tie up all the other acreage.

3. Are there other items that should be in a lease to protect the vulnerable royalty owner.

You need to address these items with your lawyer that is preparing the lease. Do not accept the oil company's lease. There is no substitute for competent legal help.

You should divide your acreage up on separate leases so that one well will not cause all of your land to be held by production.

Make sure all leases have Pugh clauses and specify what layers and depths they will be working. That way, you can lease that area below their lease to some other company.

There should be a "no deduction" clause in all of the leases. Otherwise, you will end up paying for a lot their costs.

Don't accept a bank draft that may or may not ever pay. Ask for a cashiers check at time of signing.

These are some of the things we learned the hard way. My advice to you is to get a good mineral lawyer.

Good Luck

Robert Gill,

Thank you for the great information! if a person is in the oil and gas industry, we don't know it all.

The royalty owner is not in the oil and gas industry; therefore, is at the mercy of the operator.

Any more GREAT TIPS that you are anyone else has would be greatly appreciated.