I have received an oil and gas lease which has specific royalty payments regarding oil/liquid hydrocarbons and gas but does not specifically mention a royalty payment for anything else including “brine” which may include lithium bromine, etc. the lease is in cass county Texas which has a high percentage of lithium in brine. Should I also specify a royalty percentage on the production of any brine or products extracted from brine? Anybody have any suggestions for language/clause to be included?
You are wise to recognize the lithium potential. You may want to consider language that excludes everything besides oil and gas so that you can negotiate a separate lease for lithium.
I would consult with my O&g attorney on this. The Texas legislature has been busy defining who owns geothermal and produced water. Cass county has high concentration of lithium in the Smackover formation. The lease can define ownership, but all parts of the lease must be consistent to be effective, as many of us found out with no post-production clauses in addendums that didn’t redefine royalty from “at the wellhead” to gross proceeds. Our attorney always was well worth the cost. Some links that might be of interest;
Were you able to find anything out about the lithium language? The court records just file memorandums of leases, so its tough to say what is common in your area.