New Lease Contract

We are new to the potential of leasing our land to any energy companies.

Getting a lot of interest and offers from multiple companies. We have 200+ acres in Bradford County.

For anyone who has gone thru this process, what are the top 4-5  clauses or topics that we should be sure are included to avoid issues down the road.

Reading and hearing about all kinds of deductions, non-honest operators, etc. and wanted to gain the wisdom and insight of people who had gone thru it....what would you do differently or be sure to have in a  new contract if had to do over?

Best companies you have dealt with?

Appreciate all the help and suggestions.

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Permalink Reply by jett on October 12, 2014 at 4:11pm

Sorry it has taken me so long to respond.

I personally don't know of the words "actual minimum % number to be paid" phrase written into a lease but it sure sounds like a good wording to include when you write up for gross royalty. See if you lawyer can put it in for you. Try, try, try everything you can to protect yourself.

Permalink Reply by Nancy LeNau on October 7, 2014 at 9:07pm

jett...., Very good information !  

Permalink Reply by jett on October 13, 2014 at 2:04pm

When writing up for the 5years (or whatever lease length you go for) + giving the oil/gas co first option at a 5 year renewal make sure that the renewal $$ are at least the same $$ per acre as the original lease. Many are at 110% per acre for renewal.

Some are written so that the 5 or 10 or 50 dollar "consideration" is the total that they (Oil/gas co) have to pay to renew the lease for the second 5 year term.

Instead of you the landowner getting a nice second signing bonus for renewing the lease they get away paying you basically nothing to tie you up for another term. Which of course doubles the lease length for basically the original signing bonus. You do not want that.

Permalink Reply by John Farr on October 13, 2014 at 4:40pm

Thanks very much.

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