1How long will my oil and gas lease last?
The standard primary term of an oil and gas lease is three years. However, some leases have the option to extend for an additional one to two years for an additional bonus consideration. In the event that production is commenced during the primary or extended term of the oil and gas lease, the lease will remain in force and effect until the cessation of production.
2What does the royalty mean to me?
This is the proportion of the revenue generated by developing the minerals under the land which will be paid to the mineral owner. The oil and gas company producing the minerals receives the remaining revenue to cover the cost and risk of developing the minerals. For example, on a 3/16ths lease the mineral owner will receive 3/16ths and the oil and gas company will receive the remaining 13/16ths of all the revenue generated from the development of the mineral estate.
3When should I expect to receive my bonus money?
The payment terms are typically found on the cover letter accompanying the oil and gas lease. These terms usually provide a time frame to verify the mineral ownership and a time frame to remit payment of the lease bonus.
4What is a Pooling?
A Pooling is a process wherein an operator will force other interest owning parties, with whom no agreement could be made, to elect how those parties want to go forth with the drilling of a new well. Parties who own a right to drill may elect to pay their fair share of the well (Participate) or take a cash and/or royalty bonus for their interest which is then passed to the operator. Poolings are common in Oklahoma because of the usually high number of owners in any particular area of land. Typically all parties named in the pooling order are given twenty (20) days from the date of the order to make their election. This election must be made in writing within the allotted time.
5How can I research my own interest?
All documents pertaining to land records are filed as public records at the corresponding county courthouse in which the land resides. These records can be found in the county clerk’s office and researched free of charge. Give us a call to find out how we can help you research your interest.
6Why is my interest different or less than the gross acres?
The gross acres represents the total acreage contained within the described tract of land. The net acreage, on which a mineral owner is paid, can be any proportion of the gross acreage, depending on the history of the mineral ownership.
7Why is my interest different from the document in which I received interest (for example probate or mineral deed)?
Many times a probate, mineral deed, or conveyance will be a blanket transfer wherein everything the grantor owns is transferred. Sometimes, these documents do not take into account previous conveyances of record in the courthouse. That means while a document may state all interest, the actual interest being conveyed is only what the grantor owned at the time of the conveyance. Also, there are instances wherein a mineral owner will purport to convey more than they actually own. In these cases, only the mineral interest that is actually owned at the time of the conveyance will be passed to the grantee. These types of issues many times perpetuate throughout the life of the land.
8Why does my spouse need to sign the lease? Does this affect the mineral ownership?
In the event that a mineral owner also owns a portion of the surface estate, the spouse must be joined in signature on all instruments affecting or burdening the subject property. This does not give the spouse any ownership of the mineral estate.
9Why does the lease say “for consideration of $10.00 or more dollars” when we discussed a much higher amount?
All legal contracts for transfer of property or property rights require consideration. As a means to protect the privacy of the mineral owner, the minimum consideration is shown on the document. This does not directly represent the amount that the mineral owner will be paid, as that amount will be listed on the cover letter accompanying the oil and gas lease.