Lease Terms

I am new to mineral rights ownership (via inheritance). Much thanks to all with expertise who share on this site. I am attempting to learn essentials quickly.

I have been offered 2 leases by Calyx to sign for my rights on the 2 following tracts:

1) Section 35, Township 19 North, Range 02 East, Southwest Quarter (SW/4) -- which Calyx has filed for pooling order (hearing date March 10); Additional info: Calyx offer prospectus states that this drill will extend horizontally into adjacent tract Section 26

with estimated completion of 45.9 % in Section 35 and 54.1 in Section 26.

2) Section 2, Township 18, Range 02 East, North half of Northwest Quarter (N/2 NW/4) -- no information has been provided indicating that a application for forced pooling has yet been filed on this lease.

I have received 2 separate leases (with identical terms) from Calyx via their landman. I understand that the landman represents Calyx's interests and also presume that these are form leases.


1. I would expect that there is a market rate or range in Payne County for bonus and royalty payments. Without more knowledge I can't assess if their bonus/royalty offers on form lease are fair. Any guidance appreciated, including thoughts on whether to take higher bonus and lower royalty or vice versa (obviously risks must be factored with potential total return on mineral rights owned).

2. Lease has term length stating 3 year primary term, but language in detail reads as if the 3 years is illusory, that lease essentially has no meaningful deadline if a well produces. See following:

"It is agreed that this lease shall remain in force for a term of three (3) years from date (herein called primary term) and as long thereafter as oil or gas, or either of them, is produced from the said leased premises. As long thereafter as oil, liquid hydrocarbons, gas, or their respective constituent products, or any of them is produced or capable of being produced from said land or land with which said land is pooled; provided, however, that for injection purposes this lease shall continue in full force and effect only as to the subsurface strata or stratas into which such injections are being made, together with such surface privileges as may be necessary or desirable to continue such injections."

"If prior to the discovery of oil or gas on the leased premises Lessee should drill a dry hole or holes thereon, or if after discovery of oil or gas the production thereof should cease from any cause, this lease shall not terminate if Lessee commences additional operations as provided herein within ninety (90) days thereafter, or, if it be within the primary term, then not until the expiration thereof. If at, or after, the expiration of the primary term oil or gas is not being produced on the leased premises, but Lessee is then engaged in operations thereon as provided herein, this Lease shall remain in force so long as operations are prosecuted (whether on the same or successive wells) with no cessation of more than ninety (90) days, and, if production results therefrom, then as long as production is maintained pursuant to the terms hereof."

Any guidance on lease term clause appreciated. Fair? Unfair? I am not inclined to enter into a lease with no reasonable expiration.

Much thanks in advance.

Just standard lease terms. If they get oil on this place, you get a share of the well. What did they offer you there? That is the big deal.

Regardless, of the suggestions you receive here, if you are still uncomfortable, you should see an oil and gas attorney. There are various sites on the internet, offering explanations of the lease terms in laymans language, as well. You might try just typing in oil and gas lease and click the go button.


Two and half years ago my family and I signed a lease on mineral rights in a section in 20N -2E. What's fair now versus then has changed some. We ended up with $150 per acre bonus with 3/16ths royalty which I think is lower than leases being signed now. Pooling is usually around 1/4 royalty and no bonus. So what is fair or unfair depends on the rights you own, others know more about pooling and will most likely respond. With Devon and Caylx drilling activity in the area, if it were me, I would opt for a high royalty over a bonus now. Depends on your own situation. I had an attorney review my lease agreement and he added some clauses dealing with Depth Clause, Pugh Clause, No Deductions for transportation, marketing etc, Shut-in-Royalty not longer that 2 years past expiration of primary term. Somewhere in the past on this blog site someone sent out wording to add as exhibits to a lease. Good luck with a lease or pooling. I would have an attorney review any lease to be sure what's in it.


Calyx lease does not have depth clause . No time limit on shut in clause . You need to take out deductions clause and a few other little things . The pooling is nothing to fear.

I have signed a couple of leases about a mile west of you with Calyx. One is producing an two are in the offing. One thing I did was to ask for 1/4 share and no bonus. I figure one of them might hit big and I would rather have a larger share. Of course, my leases are small, so I don't have much to lose. I thought you might like to know that you can ask for 1/4 and Calyx will probably do it if you want.

You can add an addendum to a lease which is the same thing as an exhibit, but you really need to understand all the lease clauses in order to add the right addendum clause. Here's a website with some lease clauses which might also be modified and used as addendum clauses, but once again, you really need to know what you are doing when adding to, deleting (striking) or altering a lease, so use this site as educational only. It's good to get an attorney to review a lease and it helps if you understand what they are talking about.

Much thanks for your contributions. Special thanks to Ron for his assistance.

I have made changes and modifications to lease sent to me addressing issues/clauses mentioned on this board. Lease returned to Calyx. I await their response.

If we can't agree I guess I will be force pooled. Any thoughts on that process versus capitulating to lease terms I am unhappy with?

My option was picked up by Devon for 3/16 + 175/acre in December. I'm T20 3E. I had a whole page of addendum's added by my lawyer. A few people I know, even in Noble Co just west of 177, are getting 3/16 + 150-250/acre for new leases.

Looks like big oil is going to accept my lease addendum. Then again, the ink isn't dry yet. Lol.

Thanks to contributors to this site for sharing their knowledge and experience.

I live in Milwaukee and have been offered a lease on 20 acres in Section 24 of Payne County but am totally ignorant re leases. Does any one have suggestions re a lawyer in the area?. The lease is being offered by Calyx thru Dover Trail Land Co. The description is 24-19N-04E.
Ron McKenzie said:

Calyx lease does not have depth clause . No time limit on shut in clause . You need to take out deductions clause and a few other little things . The pooling is nothing to fear.

Here is what they were ordered to pay in a pooling close to you .

Here are completion reports on some wells close to you .

Negotiate the terms of your lease with help from the forum, then take it to your lawyer if you wish to

Thanks Ron. Do I need to have a depth clause in the lease?

John, here's some web links that might help you.

These leases are made for Texas, but can be modified for Oklahoma.

Here's few more links that may help you.

Thanks Martha.

I would like to visit with you about the terms what’s been offered in the area.

I was offered a lease from Calyx for my rights in Payne County Sec. 24 19N 4E. I chose 150/ac. bonus and 1/5th royalty before hearing you could do no bonus and 1/4th royalty. I sent my lease to a Okla lawyer to look over and make changes.