Before negotiating an oil and gas lease, it is imperative that you reach out to a seasoned attorney. Furthermore, there are specific actions that you should take to ensure your success. Indeed, the following includes three tips to help you when negotiating an oil and gas lease to help protect your interests throughout the entirety of the process:
Negotiating Oil and Gas Leases
- Do your background research: An oil and gas lease establishes a binding legal relationship between you and an oil and gas company. The relationship will likely last for years and maybe even decades. Before anything else, you need to be sure that you are dealing with a reliable and trustworthy company. It is always recommended that you extensively investigate the company’s reputation and financial standing. Ultimately, you need to be sure that you are moving forward with a solid partner. You will save yourself major headaches down the road by avoiding irreputable companies.
- Understand the process: There are many different process-based issues that you need to consider. Even before you start negotiating any hard numbers, you and the company need to come to an agreement on some basic terms of the deal. This will ensure that you have a solid framework to move forward in the process. For example, you should immediately deal with issues such as how long the company has to begin production (the primary term), whether or not the company has the option to pay you to extend that time period (delay rental clause), and the terms of a potential shut-in royalty. These are just a few examples of the issues that need to be worked out at the beginning of the process. This will ensure that the negotiation process has a sturdy foundation. Once you get further into the process you will need to deal with the specifics of many more issues, including royalty clauses, pooling clauses and continuous operation clauses.
- Hire an attorney: If the process sounds confusing and overwhelming to you, do not worry; that is completely normal. Oil and gas leasing is one of the more complex areas of law. Ultimately, you should always hire an experienced oil and gas attorney who can guide you through the process and who will ensure that your rights are protected. Unfortunately, some oil and gas companies will try to take advantage of people in the negotiation process. These companies deal with these issues all the time, and they hire experienced professionals who are well acquainted with the process. By hiring your own experienced professional, you will always keep the playing field even.
Contact Our Office Today
There is a lot on the table when oil and gas rights are involved. The experienced team Hayes Law Firm is fully committed to helping protect your rights. If you have any questions about negotiating an oil and gas lease, we can help. Please contact our office today at (918) 392-4641 to schedule an initial legal consultation.