oil and gas lease


Also found in: Acronyms.

oil and gas lease

An arrangement granting the right to explore for and extract oil and gas and possibly related minerals. Some important concepts are

• Oil and gas are considered minerals, but the law pertaining to them is different from solid minerals because oil and gas are said to be “fugitive” and capable of traveling from place to place to the lands of different owners.

• Because of the fugitive nature of gas and oil, it is possible for one person to drill many wells on his or her property and effectively drain the gas and oil from all surrounding lands. As a result, many states have laws enforcing pooling of interests or unitization if the property owners cannot agree on a fair way to cooperate in production. Such laws have been held constitutional.

• Because oil and gas are considered such important natural resources, most states with significant deposits heavily regulate exploration, drilling, production, and the rights of various parties to contractual arrangements. (Such legislation must be read into contracts between the parties.)

• Leases fall into two broad categories: “or” leases and “unless” leases. “Or” leases obligate the lessee to drill or to pay “delay rentals,” but if the lessee does neither, there is not an automatic termination of the lease. By contrast, the “unless” lease says that if the lessee does not drill by a certain time, the lease will terminate unless the lessee pays delay rentals. Nonpayment and nonproduction will result in forfeiture.

• Rent under the lease is generally paid in the form of royalty payments; lessors generally reserve a one-eighth royalty interest.

• Alease on a pooled tract of land may provide for offset royalties, meaning that if no well is drilled on the subject land, but one is drilled within a certain distance of the land, then the lessor will still be entitled to royalty payments based on the production of the other well.

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The BLM generated a record $1.1 billion from 28 oil and gas lease sales in Fiscal Year (FY) 2018.
Seller, Mark Mattheis; buyer, Smiley Oil LLC; Oil and Gas Lease; E/2 SW & SW SW Sec 9 T8SR10E.
The expert-authored Natural Resources Library provides practitioners with in-depth analysis and practical guidance drawn from Williams & Meyers, Oil and Gas Law; The Law of Pooling and Utilization; The Law of Oil and Gas Leases; Law of Federal Oil and Gas Leases; and Southwestern Legal Foundation: Annual Institute on Oil and Gas Law.
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Oil and gas lease sales support domestic energy production and American energy independence.
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M2 EQUITYBITES-September 10, 2015-New Western Energy Buys Oklahoma Oil and Gas Leases
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Development of Existing Leases: In October 2008, GAO reported that Interior could do more to encourage the development of existing oil and gas leases. Federal leases contain one provision--increasing rental rates over time for offshore 5-year leases and onshore leases--to encourage development.
Sydney, Australia, Aug 31, 2010 - (ABN Newswire) - AusTex Oil Limited (ASX:AOK) is an Australian listed oil and gas producer, focused on reworking and developing oil and gas leases in the USA.
MASS Petroleum is pleased to announce it has signed a LOI with JKA Ventures to acquire various oil and gas leases located in Kansas, USA.
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