"Favored Nation Clause"

Oklahoma Mineral Rights Grady County, OK
1

Can anyone tell me what a "Favored Nation Clause" means? Thanks

2

A favored nations clause is a clause in a lease that (AND THIS IS ALL DEPENDENT ON THE LANGUAGE) that if you pay someone more than you paid me, you will pay me the difference.

Oil companies do not like them at all. I do not either. A Favored Nations Clause will work against me if I can negotiate a higher rate and the oil companies are hampered by Favored Nations issues.

There are as many differences in language as favored nations clauses.

3

I had never heard the term used in relation to mineral leases. Thank you, Buddy, for the explanation.