if you could redo your lease...

Knowing what you know now, if you had the chance to change anything about your lease, what would it be?

I have one i haven't signed yet and plan to meet with a lawyer to review it next week and hope to take notes from those who have been through this process already.

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Permalink Reply by Philip Brutz on March 22, 2014 at 9:25am
Permalink Reply by INVICTUS on March 22, 2014 at 7:31am

Go online.

Google: ALOV

Google: SURE

Start there.

Read EVERY post in this site. I'm not kidding. You will find lots of gems here.

Then read the other associated sites. Same thing.

Educate yourself. It's a long process and there are no shortcuts.

Don't be  cheap with your lawyer.

Find a good OIL & GAS attorney with years or primary experience in this field.

Permalink Reply by The Hiker on March 22, 2014 at 11:43am

Mark:   If I had it to do over again, I would include language about how the sales price is determined;  Is it their long term hedged price, is it based on NYMEX strip....or is it something else.   Is it the actual sales price?   How is that determined?   Prices fluctuate every day.  How are liquids priced?  Once your gas and associated liquids enter into the pipeline to the treatment plant, all traceability is lost, so I would absolutely want to know how is that volume of gas measured and priced.  Does the company buy your gas from you on the day it's produced, or do they hold it, process it, and sell it later?   Does that method conflict with the "sale to an affiliate clause", when the affiliate is the company itself?   I would want language giving me access to the recording device at the well...or some code to poke into some company website where the production information is being beamed to, so I could check it periodically for comparison to the numbers on the royalty check.   Sure, trust...but verify.   The old shallow wells had meters you could check, so why not the new horizontal ones?   It's always a good idea to include language like that in the ALOV or the MCWD leases, but after it's all over.....the well is producing and you are receiving your checks....it would be great to be able to easily check up on the actual production numbers and gas analysis results.

Perhaps some language about them using your gas to run equipment at the well...heaters, engines, etc...   I think there may be points where your gas is siphoned off to provide energy for things, and these uses aren't recorded before the "sale" point.   Maybe a minor issue, but maybe not.

Permalink Reply by INVICTUS on March 22, 2014 at 11:57pm

Our pad appears to be completely digitized and includes some sort of microwave link to another site. The only analog metering appears to be pressure gauges for immediate easy reference.

Definitely get audit rights put into the lease.

For reference, I've attached three pictures:

First one is the tank battery panel

2nd one are two panels at the RF Transmission point

3rd one is a digital meter at a well, looks like digital pressure gauge

Gives one an idea how measurement is done at one pad site.

Attachments:
Permalink Reply by cj wyalusing on March 25, 2014 at 2:26am

Great info whith in a hour i was out side with binoculars  !

Permalink Reply by Philip Brutz on March 22, 2014 at 4:24pm

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