I am trying to finalize a oil and gas lease. Can anyone direct me to a reference for getting wording for a "Favored Nations Clause. Thanks
Check this out. You might search out under " Most Favored Nations Clause"! I will say that this is something that should be in every lease; but, almost impossible to get a company to agree too. They like to play the "used car" salesman game by playing one neighbor against the other.
http://agrilife.org/texasaglaw/2013/09/09/most-favored-nations/
Not sure where this initially came from; but, this is another document that has some information on the MFNC. Long document; but, open it up and go to page 12. It is obvious that this group put a lot of work developing this document.
http://www.gordonarata.com/720DE/assets/files/lawarticles/58thMLI.pdf
Good Luck
Unless your tract is absolutely integral to the development of the field, or you have a lot of bargaining power (or you are leasing to a company that will be flipping the property) most companies will reject these out of hand. It imposes a harsh administrative burden on the oil company who has to track its obligations under hundreds, if not thousands of leases. To the oil company it’s one more “gotcha” that can come back to bite them. A MFN clause is great if you can get it, but in today’s market, I would be surprised if you can get one.