An oil and gas lease land contract is a legal form where landowners (“lessors”) provide energy companies (“lessees”) with the right to explore, extract, produce, and distribute oil and gas sources from private land property. This legal document protects the landowner’s rights, confirms the lease legality for state governments, and outlines all terms and conditions of oil and gas extraction for the established royalty price.
There are two simple types of oil and gas lease purchase option contracts – a surface or subsurface lease and a right of first refusal lease agreement.
This type of oil and gas lease purchase agreement describes the features of land work that the lessor creates for the lessee. If necessary, the landowner can also limit them and the surface square for oil exploration and extraction. The landowner can control other essential tools for hydrocarbon operations:
As a landowner, you can always restrict the activities on your property land if you find them inappropriate. However, all the parties’ obligations remain negotiable for oil and gas lease forms.
This type of oil and gas lease option contract implies that your current document will not be renewed, and the energy development company refuses any land lease offers from other landowners. In all opposite cases, oil and gas lease option contracts renew automatically, preserving the same duration and scope of work.
Energy companies use geological maps to search for a perfect land to start drilling oil or gas and/or producing various hydrocarbon products. If you have a vast private land property, land businessmen can easily reach out to you and offer to cooperate.
Providing land acres for hydrocarbon exploration and development can become a perfect business opportunity for landowners if both sides negotiate correctly with a well-composed landman oil and gas lease form template. This kind of legal document has been well-known for over a hundred years and has gathered all the essential points for a perfect document structure and reliable business growth and partnership.
Standardized lease agreements for oil and gas may often lack industry-specific clauses. In cooperation with land managers and attorneys, Lawrina legal professionals have created a sample of a state-compliant oil and gas lease purchase agreement, with up-to-date industry-related provisions. Using this Lawrina’s legal form, you will manage to set all core details of your land deal. Below you will see the crucial components of a general oil and gas lease letter template.
Before drafting your blank oil and gas lease form template as is, make sure you have the following information:
Now you should correctly insert these details in the following clauses of oil and gas lease letter templates:
These clauses only gain their legal force in oil and gas lease purchase agreements.
Negotiations between the parties play a significant role in oil and gas deals. Specific rules will help the parties achieve their goal and start their cooperation immediately.
First, landowners should research the oil and gas companies offering them the mineral resources lease and set the whole production on their land. It is recommended to pay attention to the type of entity that contacted the lessor (e.g. a land manager, a broker, or someone working on the same tasks as these two) and the oil and gas company itself (its market presence, number of successful leases, location, etc.)
When lessors have found potential lessees, they should arrange meetings and discuss the exact information related to the clauses of oil and gas forms. This can be:
You can use this Lawrina’s template to draft your oil and gas lease. When having all the aforementioned information, you can put it in the document sample. Lawrina’s questions related to this oil and gas lease form will help you fill it out to the tiniest details.
When you finish editing your template, Lawrina will send it to you via email or you can download the printable PDF version immediately.
You can review your document once again and forward it to the other parties if all is set. You can also give the agreement to your energy attorney for more qualified revision.
When both parties agree to the lease document content, they can sign it and have it notarized at their public state institutions.
Oil and gas fossil fuels have always played a significant role in the energy sector. The need for well-composed and legally enforceable documents has risen when multiple legal templates turned online.
A lease agreement for oil and gas is one of the initial steps between landowners and energy companies before cooperation. Based on this oil and gas lease form, lessors and lessees can create other lease-related oil & gas agreements, e.g. ratification lease, notice lease, amendment lease, etc. When this contract includes all its specific provisions which parties have discussed in detail, the chances to end up in disputes or court are lower.
The parties’ signatures should be notarized in oil and gas lease land contracts. Most US states require notarized documents for state land records.
Before you introduce your oil and gas lease to the notary, double-check your legal form and remove errors and typos if you have found any.
Commonly, oil and gas leases have primary and secondary terms. The primary term is a permanent duration of the lease that can last from one to ten years in full.
The secondary term is activated after the primary term expires if the parties still agree with the term clause of the oil and gas lease purchase option contract. In the case of continuing the cooperation between the parties, the secondary term expires when the sources deplete. Before enabling the secondary term, companies should pay for the lease extension.