Does anyone have a copy of a lease, or an example of a lease, that is specifically a production payment? Meaning the lease was tied to a specific dollar amount and once satisfied, expires? Redact everything you’d like, all I am looking for is the language used to define terms. Thanks!
I have never heard of a oil and gas lease that allows recovery of the specific dollar amount. Every lease I see has a clause that provides for the least to continue as long as there is production.
it is not unusual for a lease to be held for decades. There might even be a few leases held by production for over 100 years.
That is why it is important to have good lease terms at the outset.
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Ive seen this in mineral deeds, in the 40+ years Ive been around the industry, Ive never seen this for an OGL. Not sure what you are trying to prove/disprove, but good luck!
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From what I have been told, they were popular in deals around 1950s.
Thanks for that info Bob77! That is a great point!
This is not an oil and gas lease. It is an assignment of an existing oil and gas lease from the Assignor Lessee to 2 new lessees, Richardson and Bass, who were operators. You can tell this because the original lessor is United States. In addition to receiving some cash, the Assignor was to be be paid 3% of gross sales up to a total of $500 acre for net acres included in underlying lease. Basically this is delayed purchase price because no well had been drilled. If no well was ever drilled, the Seller Assignor would get nothing.
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Thank you for that! I am new to all of this, trying to figure it out. In this assignment, the reference to the 1951 lease, I assume is between the US (original lessor) and the Assignor here in this document?
Was/is this normal practice? This assignment was filed with another adjacent section, which was a 3%ORRI. The two sections were listed with the same lease number, written and signed on the same day. Is it normal, to file two sections, with different terms, in the same lease? A decision letter the BLM filed leaves out the expiration of the $500 per acre.
Thanks again!!
Like TD said above, this isnt a lease, its an assignment. Basically they assigned the leasehold interest, withholding 3% interest of the payments until they recovered $500 per acre, which in 1952 was a good amount of money, Id assume. Upon completion of payout of $500 per acre, all rights convey unto the Assignee and the assignment is null and void
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