Oil/Gas Lease: After -Acqired Interest Clause

What rights and privileges does the following clause in an Oklahoma oil/gas lease provide to the Lessee (OG Company)?

What rights and privileges and protections does the following clause in an Oklahoma oil/gas lease provide for the Lessor?

"...the following described land together with any reversionary rights and after-acquired interest..."

Is there language we should include in the lease to protect/exclude our future purchases in the same section, township and range from being held by this lease?

Should we include language to ensure the lease in question applies only to property currently owned in the given section, township and range as of the effective date of the oil/gas lease in question?

Should we include language to ensure we are paid the same negotiated production rate and lease bonus and overriding interest for any additional property found to be owned by us as of the effective date of the lease in question?

Many Thanks,

Mel Wood

M.D., You are so bright. You not only read leases but apply the meaning to your objectives. Wish more of my clients would do the same before its too late.

As a practical management (not legal) standpoint, I put a period after "land" and delete the remainder of the sentence. That is in keeping with my management philosophy of only including one section in a given lease and requiring the land agency to do their title work. It is OK in my opinion to pledge minerals under easements and rights-of-way within the boundaries of a lease parcel if the price is right. At the time of the lease, ownership may be in question.

Because of future title disputes and wide distribution of undivided interest and re-conveyances within families it is most unfair to the mineral owner is to be forced to automatically include minerals that they did not own at the time of the lease and in the opinion of the lease ownership take-off individual.

It doesn't seem fair to me that a lease form demands that the owner commit everything that they own now and in the future then demands that the owner warrant title. Today's lease forms don't offer anything to the mineral owner but a promise to pay a royalty someday maybe. Good eye. Make the lease form fit your needs before you give up total control.

Thank you, Gary.

Dear Ms. Wood,

There are several changes that need to be made to make it work for you. I am not a lawyer, but this is what I do on my personal lease forms and I offer them to you solely as my business advice.

First, I use the word quit claim in the granting clause of the lease.

Second, I stipulate the net mineral acres in the granting clause of the lease. If there are multiple tracts of land on the lease, I stipulate the net mineral acres leased under each tract as well.

Third, I add a provision that should a later title examination reveal additional mineral interest(s), then the lessor make an additional payment of bonus, non-development penalty, etc.

Fourth, I use a BROAD disclaimer of warranty.

In your case, you might want to consider adding a clause to fit your needs. An interlineation does not do that much, from my understanding of the rules of construction. Marking through a clause does not mean that it is gone -- with many lease forms, after acquired title is brought back in under common law. So, fix that problem by stating that it is your intention to lease the actual mineral acres owned by you at the instant of execution of the lease (which we defined in the granting clause) and acceptance and receipt of delivery to the oil company by them paying a bonus consideration.

Best wishes and good fortune.

Buddy Cotten

Thank you, Buddy.