Oil and Gas Lease Clauses

Oklahoma Mineral Rights Garvin County, OK
1

I received a sample of Continentals “standard” OGL and I have a problem with 2 (so far) and wondered what the community thought.

the 1st deals with what sounds like a forever easement: Lessee shall retain a continuing right-of-way and easement over, upon and across all of the leased premises to the extent necessary for Lessee and/or its gas purchaser to conduct its operations on the leased premises or lands spaced therewith, regardless if part of the leased premises revert or be released to Lessor.

The 2nd sounds like a give-away of production for lease use: Lessee shall have the right to use, free of cost, gas, oil and water produced from said land for its operations thereon, except water from wells of Lessor.

I don’t know how much gas/oil could be used for ongoing operations of dehy’s, compressors etc but I do know companies have pulled loads of oil for use workovers. Any thoughts?

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2

The first one gives access to the surface forever which I don’t like having in a mineral lease.

I strike the free use of oil, gas completely. There is a whole thread under my name regarding that one.

3

Be sure to negotiate or provide your own lease.

4

Dear Laura_C

You have only scratched the surface on clauses and changes to the “standard” lease form.

There is a whole segment of the industry devoted to providing a comprehensive lease form, especially when the mineral owner is also the surface owner.

Best,

Buddy Cotten

5

What do you think of the following clause and should I strike “agrees to defend” not exactly sure what they are saying here.

Lessor hereby warrants and agrees to defend the title to the lands herein described 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.

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6

Here is the full paragraph: “Lessor hereby warrants and agrees to defend the title to the lands herein described 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.”

7

This is a “warranty clause” and favors only the lessee. Some folks (myself included) have added a clause in their lease form or exhibit A which speaks to the complete opposite “This lease is executed without warranty of any kind…”, etc. Some folks simply mark through or redact the clause all together and initial the change for identification. Usually if the lessee has done their title work, they don’t mind the clause being redacted/removed.

8

I mark through “hereby warrants and agrees to defend the title to the lands herein described and”.

The rest is a holdover from the days when the surface was still attached to the minerals.
I also add a clause for no warranty of any kind in my Exhibit A.

(not giving legal advice…)

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