If anyone has the lease clause attachment to correct these bad leases please email to me.
Thanks
Capt. Cam
What bad leases are you referring to?
The ones with all the bad clauses that a mineral owner should not agree to. The first lease you get from the leasing companies.
As a landman working for Bearcat I can tell you that we will do the following just for the asking. A depth clause, a pugh clause, a gross proceeds (no deductions) clause, and a shut-in clause. We will also routinely strike the warranty if we have a good title opinion or other solid reasons for doing so.
Yes those are some if not all of the bad clauses. I have seen someone with and attached that corrects or deletes all these clauses from a lease. It is that attachment that I am looking for.
I guess I'm somewhat confused. The standard lease that I use does not contain any of these clauses unless the mineral owner wants them. The only clause that is "built-in" is the top lease clause. From what you are saying you do not want any clauses on a lease which is exactly how they come (at least from me) unless you ask me to include one.
The lease we got has all of these clauses and more that we would never agree to. See redacted lease below.
OK-PAID UP
OIL AND GAS LEASE
(Paid-up)
AGREEMENT, made and entered into this |
31st |
day of |
August |
, |
2015 |
, by and between: between: |
, of , party of the first part, hereinafter called Lessor (whether one or more), and, Oklahoma City, OK 73134, party of the second part, hereinafter called Lessee.
WITNESSETH, that the said Lessor, for and in consideration of Ten Dollars, cash in hand paid, and other good and valuable consideration receipt of which is hereby acknowledged and of the covenants and agreements hereinafter contained on the part of Lessee to be paid, kept and performed, has granted, demised, leased and let and by these presents does grant, demise, lease and let unto the said Lessee, for the sole and exclusive right to explore by geophysical and other methods, for mining and operating for oil (including but not limited to distillate and condensate), gas (including casinghead gas and helium and all other constituents), re-entering or using existing wellbores and for laying pipelines, and building drill sites, access roads, tanks, power stations and structures thereon, to produce, save and take care of said products, all that certain tract of land, together with any reversionary rights therein, situated
in the County of |
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, State of Oklahoma, described as follows, to-wit: |
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of Section |
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, Township |
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, Range |
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, and containing |
26.575 |
Gross acres, more or less. |
In addition to said land, Lessor hereby grants, leases and lets exclusively unto Lessee, to the same extent as if specifically described herein, all small strips or parcels of land and accreted lands owned by or claimed by Lessor which are adjacent, contiguous to or form a part of said land, including all oil, gas and all substances produced in association therewith underlying lakes, rivers, streams, roads, easements and rights-of-way which traverse or adjoin any of said land.
1. It is agreed that this lease shall remain in force for a term of |
Three (3) Years
) |
from date (herein called |
primary term) and so long thereafter as oil or gas, or either of them, is produced from said land or lands pooled therewith.
On or before Three (3) years from the Effective Date, if this Lease is not otherwise continued in force, Lessee, at its option may automatically renew this lease and extend the Primary Term for an additional Two (2) Year term if, on or before Three (3) years from the Effective Date, Lessee tenders the agreed upon bonus amount to Lessor’s depository agent named herein or directly to Lessor as shown.
2. In consideration of the premises the said Lessee covenants and agrees:
A. To deliver to the credit of Lessor free of cost, in the pipeline to which it may connect its wells, a
3/16ths |
Part of all oil (including but not limited to condensate and distillate) produced and saved from the |
leased premises.
B. To pay Lessor for gas (including casinghead gas) and all other substances covered hereby, a royalty
of |
3/16ths |
of the proceeds realized by Lessee from the sale thereof, less a proportionate part of the |
production, severance and other excise taxes and the cost incurred by Lessee in processing, gathering, treating, compressing, dehydrating, transporting, and marketing, or otherwise making such gas or other substances ready for sale or use, said payments to be made monthly. During any period (whether before or after expiration of the primary term hereof) when gas is not being so sold or used and the well or wells are shut in and there is no current production of oil or operations on said leased premises sufficient to keep this lease in force, Lessee shall pay or tender a royalty of One Dollar ($1.00) per year per net royalty acre retained hereunder, such payment or tender to be made, on or before the later of ninety (90) days following the date of shut in or the anniversary date of this lease during the period such well is shut in, to the Lessor. When such payment or tender is made it will be considered that gas is being produced within the meaning of the entire lease.
3. If the Lessee shall commence to drill a well or commence reworking operations on an existing well within the primary term of this Lease or any extension thereof, or on acreage pooled therewith, the Lessee shall have the right to drill such well to completion or complete reworking operations with reasonable diligence and dispatch, and if oil or gas, or either of them, be found in paying quantities, this Lease shall continue and be in force with like effect as if such well had been completed within the primary term. In addition, if at any time or times after the primary term, there is a total cessation of all production, for any cause (other than an event of force majeure), this lease shall not terminate if Lessee commences or resumes any drilling or reworking operations or production within one year after such cessation. Drilling operations or mining operations shall be deemed to be commenced when the first material is placed on the leased premises or when the first work other than surveying or staking the location is done thereon which is necessary for such operations.
4. Lessee is hereby granted the right at any time and from time to time to unitize the leased premises or any portion or portions thereof, as to all strata or any stratum or strata, with any other lands as to all strata or any stratum or strata, for the production primarily of oil or primarily of gas with or without distillate. However, no unit for the production primarily of oil shall embrace more than 40 acres, or for the production primarily of gas with or without distillate more than 640 acres; provided that if any governmental regulation shall permit or prescribe a spacing pattern for the development of the field or allocate a producing allowable based on acreage per well, then any such unit may embrace as much additional acreage as may be so permitted or prescribed or as may be used in such allocation of allowable. Lessee shall file written unit designations in the county in which the leased premises are located unless the pooling or unitization results from governmental order or rule, in which case no such written designation shall be required. Operations upon and production from the unit shall be treated as if such operations were upon or such production were from the leased premises whether or not the well or wells are located thereon. The entire acreage within a unit shall be treated for all purposes as if it were covered by and included in this lease except that the royalty on production from the unit shall be as below provided, and except that in calculating the amount of any shut in gas royalties, only the part of the acreage originally leased and then actually embraced by this lease shall be counted. In respect to production from the unit, Lessee shall pay Lessor, in lieu of other royalties thereon, only such proportion of the royalties stipulated herein as the amount of his acreage placed in the unit, or his royalty interest therein on an acreage basis bears to the total acreage in the unit.
5. If said Lessor owns a less interest in the above described land than the entire and undivided fee simple estate therein, then the royalties herein provided shall be paid to the Lessor only in the proportion which his interest bears to the whole and undivided fee.
6. Lessee shall have the right to use, free of cost, gas, oil, and water produced on said land for its operations thereon, except water from wells of Lessor.
7. Lessee shall have the right at any time to remove all machinery and fixtures placed on said premises, including the right to draw and remove casing.
8. If the estate of either party hereto is assigned, and the privilege of assigning in whole or in part is expressly allowed, the covenants hereof shall extend to their heirs, executors, administrators, successors or assigns. However, no change or division in ownership of the land or royalties shall enlarge the obligations or diminish the rights of Lessee. No change in the ownership of the land or royalties shall be binding on the Lessee until after the Lessee has been furnished with a written transfer or assignment or a true copy thereof. In case Lessee assigns this lease, in whole or in part, Lessee shall be relieved of all obligations with respect to the assigned portion or portions arising subsequent to the date of assignment.
9. If at any time within the primary term of this lease or any continuation thereof, Lessor receives any bona fide offer, acceptable to Lessor, to grant an additional lease (top lease) covering all or part of the aforedescribed lands, Lessee shall have the continuing option by meeting any such offer to acquire such top lease. Any offer must be in writing and must set forth the proposed Lessee's name, bonus consideration and royalty consideration to be paid for such lease, and include a copy of the lease form to be utilized reflecting all pertinent and relevant terms and conditions of the top lease. Lessee shall have fifteen (15) days after receipt from Lessor of a complete copy of any such offer to advise Lessor in writing of its election to enter into an oil and gas lease with Lessor on equivalent terms and conditions. If Lessee fails to notify Lessor within the aforesaid fifteen (15) day period of its election to meet any such bona fide offer, Lessor shall have the right to accept said offer. Any top lease granted by Lessor in violation of this provision shall be null and void.
10. All express or implied covenants of this lease shall be subject to all Federal and State Laws, Executive Orders, Rules and Regulations, and this lease shall not be terminated, in whole or in part, nor Lessee held liable in damages, for failure to comply therewith, if compliance is prevented by, or such failure is the result of any such Law, Order, Rule or Regulation, or operation of force majeure.
11. This lease shall be effective as to each Lessor on execution hereof as to his or her interest and shall be binding on those signing, notwithstanding some of the Lessors above named may not join in the execution hereof. The word "Lessor" as used in this lease means the party or parties who execute this lease as Lessor, although not named above.
12. Lessee may at any time and from time to time surrender this lease as to any part or parts of the leased premises by delivering or mailing a release thereof to Lessor, or by placing a release of record in the proper County.
13. Lessor hereby warrants and agrees to defend the title to the lands herein described and to indemnify Lessee of all adverse claims thereto, and all expenses incurred by Lessee in defending such claims, including reasonable attorney fees, and agrees that the Lessee shall have the right at any time to redeem for Lessor by payment any mortgages, taxes, or other liens on the above described lands, in the event of default of payment by Lessor, and be subrogated to the rights of the holder thereof.
14. The Lessee's failure to comply with any covenant or obligation of this lease shall not result in the forfeiture of the lease unless and until Lessor has provided Lessee notice of such default and gives Lessee sixty (60) days in which to cure such default.
15. When requested by the Lessor, Lessee shall bury its pipe lines below plow depth.
16. No well shall be drilled nearer than 200 feet to the house or barn now existing on said premises, without the written consent of the Lessor.
17. Lessee shall pay for all damages to growing crops on said land that are caused by its operations.
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IN TESTIMONY WHEREOF, we sign this the |
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day of |
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, 20 |
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It looks as though you need a shut-in clause, a gross proceeds (no deductions clause) a pugh clause and a no warranty clause. Perhaps even a no top lease and no option to extend. What section are we talking about here.
Yes were can I get those needed clauses, Section 4
Those clauses are on a form that I can attach to a lease from bearcat, I'm sorry but I'm not allowed to just put them out there on the web for everyone to see. Give me a little more information like township and range. Bearcat is leasing in stephens county and I would like to be able to help you. send me a private message and I will be happy to assist you. Better yet just call me 580-220-7998