A Fair Oil & Gas Lease

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A fair oil & gas lease is what most people are looking for. Whether it was a false start, the use of banned substances, or the throwing of a badminton game, the recent London Olympics reinforce our insistence on fairness. Just like in the Olympics, land and mineral owners want to be treated fairly.

What is a fair oil & gas lease offer?

One of the most common questions about oil and gas leasing is whether the offer is fair. The initial oil and gas lease offer that you receive is anything but fair to a land or mineral owner. Oil and gas leases are increasingly structured to the favor of the oil and gas company. If you are advised that the oil and gas lease you receive is fair or alright as is, then you should rethink the advice you’re receiving. Today’s oil and gas leases are anything but fair to land and mineral owners.

If you’re looking for fairness within the area being leased, do your homework. Check for fairness within an area by looking at the county pages of the Mineral Right Forum or talking to your neighbors. Check on the royalty and bonus, but also check on other terms such as the length of the lease and other concessions being offered such as Pugh clause language, warranties, or surface protections. While companies want everyone to sign the same, initial lease offer, companies routinely accept changes. Do your homework to make sure you are treated fairly.

You'll need to do research to get a fair trade

If you’re looking for fairness, signing the initial lease offer is unlikely to achieve the fairness you’re looking for. If you want to be on an even playing field with the oil and gas company, changes to the oil and gas lease before you sign are crucial to ensure a fair lease.

Jenna H. Keller, Esq.

Attorney at Keller Law, LLC. (www.kellerlawllc.com)

Jenna H. Keller defends property rights and provides legal services to farmers, ranchers, rural property owners, and severed mineral interest owners in the areas of estate planning, natural resources (oil, gas, wind), real estate, and water.

The information in this article is for general information purposes only. This article should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading this article does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided in this article.

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Please help me. I was offered a lease but they refused to tell me how to contact the other family members on this lease. I refused to sign as a result. It was a lousy deal. I own 11 acres of an undivided interest in about 100 acres in Kings County. How do I get this information without traveling to Kings County Calif. to the county offices? At these offered prices, hiring a lawyer is not an option.

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If everybody in an area signed for the same bonus and same royalty on the same lease form then they were all treated fairly, right?

We have some crybabies whose grandpappies signed a lease in the 1940's (that is still producing) for the typical 1/8th royalty and wonder why they (the second generation heirs) were being treated so unfairly. I have seen those crybabies on this board and I bet that they were the type to pitch a temper tantrum in the 5&10 cent store if they did not get their way and their parents coddled them and never taught them the facts of life.

Fair seems to be a transient term. What is fair today, WILL be unfair in the future as new suits, new legislation, new drilling and production techniques are acquired.

If an oil company refuses to acquiesce to a landowners demands and walks away from the deal, is the landowner being treated unfairly? Is the landowner going to fall to the ground and kick his feet because one persons definition of fair was not the same as the others. If it was the one that walked away with the offer money, then he is some sort of evil Nazi.

If one landowner does his homework, hires a professional negotiator of leases or an attorney and another does not, and the more sophisticated landowner is able to strike a better bargain, but the other accepted the money, is this a question of fairness or the definition of capitalism? Or better, should an idiots hand be held by the legislature? Perhaps the two landowners were unequally yolked. One might have an independent source of income and the other has a mother with cancer. Define Fair. You cannot. The Olympic Committee has set rules for fair play -- written down and enforced. Define the rules for fair play in an oil and gas lease transaction.

We are going socialist anyway. The EPA will likely outlaw fracing in horizontal wells with a lame duck administration. Is that fair? Companies have invested Trillions of dollars to have the rug pulled out from under them. Fair would be just compensation.

I am off my soapbox.

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I have 280 leaseed acres in sublette cty wyo. would like to sale mineral rights,what is the best way to offer mineral rights to a company,i have been trying and trying, my name is john ames e-mail- [email protected] need all the help i can get thanks ahead of time

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The more I read here the better I feel about being the only person around to ask dumb questions. As for FAIR, I have always been taught that nothing is fair, expecially to everyone. Being the self appointed Master of dumb questions, I still look for one answer to one question that ALL of us really care about, "How much money will I make from producing wells?" Can a person such as myself, who only owns 1.6875432467 acres on a gross of 320 acres, expect enough of a return if the well is actually drilled, horozontal, and starts producing? I see a "good" well can produce 20,000 daily, but then, this in on the Internet, where 90% is probably balony. Then I see "great" wells can go over 50,000. I think I will attempt to open a DUMB QUESTIONS FORUM on this site, just to see if they will consider such a request just too dumb to allow. Mean time, I will just continue my activity of writing thousands of Poems, which is also a NO Win NO Profit NO Sleep venture. Maybe there are some poems about Oil and Pro-Fracking in this tired old heart.

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I signed one of the early leases in our area after consulting with a local attorney. I found out later that he had a lease with the same company that he directed me to sign with.

I now know, after about 3 years of learning, that I have what I think is probably to worst lease there is.

I was not informed that the terms of these leases where niegotiable nor was I informed about the Pooling process.

I have the following clauses in my lease that where not addressed by my attorney.

Net production vs Gross production

No depth clause

Shut-in clause

Someone asked me who had our lease and I was not sure if it was the landman or the production company.

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Ronald Von Wilson,

If I remember right, you own 1.68 a in Logan Co. So, first lets get to Logan Co production, some wells are making 40 bbd while others are about 500 bbd. This is test only, so you can figure about 1/2 of this amount when the well stablizies. Lets say, the well stablizies at 100 BBD on 640 A spacing, you would be lucky to get $150 before taxes. So, don't quit your day job.