Summary
From the mineral owner’s perspective, an oil company seeking a lease is
generally a welcome sight. The prospect of productive wells on the property
could mean substantial income. Before exploration can begin, however, the
mineral owner (lessor) and the oil company (lessee) must agree to certain terms
regarding the rights, privileges and obligations of the respective parties during
the exploration and possible production stages. The negotiation of these terms
may be the mineral owner’s first exposure to an oil and gas lease. Because of
the legal nature of the leasing arrangement, an inexperienced mineral owner
may be at a disadvantage when dealing with a more experienced lessee.
The purpose of this report is to acquaint nonexperts with the more common
provisions of an oil and gas lease and explain their legal significance. The
report details some provisions that the mineral owner may wish to insert for
personal benefit and protection. However, the report is not a substitute for
legal counsel.

Please see the attached from http://recenter.tamu.edu/pdf/229.pdf