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Lubbock, Texas | you need to get a lawyer with oil and gas experience
there re many things to consider besides just the lease and the amounts
the pugh clause mentioned before basically says if they lease 200 acres from you and 40 of that 200 is what they end up pooling and producing from then after a period of time the other 160 acres is released from being under contract......this keeps a company from developing a few acres while holding many more acres of yours for basically free until they decide to give them up
there are other things to consider you ABSOLUTELY need to be paid if you lose acres to surface needs like roads, separation and storage tanks, pump jacks, drill sites ect.......you should be paid up front and yearly for those and should try and get them restored to as previous to development if they pull out
I have read of some people collecting money if even a small collector pipeline from off property runs through their property......so if you are on the terminal end or near the terminal end of a small pipeline where it feeds into a larger one you can try and collect a small fee for all the other oil from the headend of that pipeline that comes across your property.......just like you can try that with just a pipeline of any type.....sometimes you get it sometimes you do not
who has access to your property......clear restrictions on what they can do like no guns of any type if you have game with value (oil field people will poach like wildfire if given the chance).......gates always secured if you have cattle or theft issues or any other reason.........where and how flow lines can be run......if you let them they will run crap on the surface wherever whenever all over the place
you can try and force them to identify the zone of interest......5,000 feet below the surface in the Precambrian zone in the whatever outcropping........the other zones are not leased.......this prevents them from coming in and just scatter shooting from 5,000 to 15,000 feet just to find anything
you also need to keep in mind not to be too greedy (even though all the tings I listed above are stretching it and often only ask for in well developed areas with experienced leasers/lessees....remember 100% of nothing is nothing.......there is a good chance they might find nothing and if you held out for big dollars up front and they blew you off and were going to "pool" you later anyway and your neighbors all get $15-$20 per acre and they find nothing well you will get nothing and like it while your neighbors got $15-$20 per acre for letting them poke around
it is more important most of the time to get the % interest higher anyway if they find something that is where you will really make some money anyway because again unless you are in a well developed area or on the fringes of a hot area that a company really wants to explore they are not going to pay as much up front just to look around.......1/8 is pretty much the lowest usually offered so there could be some room there for sure again it depends on your area
again SIGN NOTHING AGREE TO NOTHING without talking to an EXPERIENCED OIL AND GAS LAWYER.....there is no reason that your lawyer has to draw up an 100% fresh contract, but there is no reason that they can not insert many common clauses to protect you and make sure that they either do something in a set period of time at a set range of depths or they GTFO and ive you your rights back and also you need to be aware of what production especially on your property means as far as people coming on your property, needs for water, space, roads, collector pipelines, power poles ect......if you just sign something then you can expect things to just appear and you signed that right for them to appear and got nothing for it most likely
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Oil / Gas lease "machinery" (??)
