Get Oil, Gas and Mineral Lease

What is a paid-up lease? At one time, the oil and gas company paid a delay rental payment to the landowner during the initial or primary term of the lease. The delay rental payment was usually paid on a yearly basis.

If a lease is a "paid-up" lease, then the lease will remain in effect during the entire primary term with no further payments to the Lessor unless and until actual production of oil or gas is established. Shut-in royalty. After the primary term, a lease will expire unless oil or gas is being produced.

Most leases have two terms that affect their duration. The primary term is a fixed period of time (e.g. five years) during which the lessee has to achieve a certain result. If that result is achieved, then the secondary term kicks in, which is of indefinite duration.

In the event oil and gas were found and the wells produce, then the royalties kick in. So if the oil well produce 100 barrels a day, and the price of oil is $80 per barrel that month, then the cash flow is 100x$80 = $8,000/day The royalty owner, who agreed to 15% royalty, would receive $8,000 x 0.15 = $1,200/day.

The lease gives an oil or gas company the right to explore for and develop the oil and gas deposits in the area described in the lease. When you (the lessor) sign a lease you essentially become a partner with that company (the lessee).

An oil lease is essentially an agreement between parties to allow a Lessee (the oil and gas company and their production crew) to have access to the property and minerals (oil and gas) on the property of the Lessor. The lease agreement is a legal contract of terms.

In most cases, oil and gas rights are leased. The lessee is usually uncertain if oil or gas will be found, so they generally prefer to pay a small amount for a lease rather than pay a larger amount to purchase. A lease gives the lessee a right to test the property by drilling and other methods.

Oil and Gas Rights Mineral rights often include the rights to any oil and natural gas that exist beneath a property. The rights to these commodities can be sold or leased to others. In most cases, oil and gas rights are leased. ... A lease gives the lessee a right to test the property by drilling and other methods.

Typically $200-$500 per acre. The bonus will be paid once at the time of the signing of the lease, and it may be the only money the landowner will get. The second is the oil and gas royalty which is the percent of the money generated by the oil and gas from his property.

Production Month Oil is often paid 2 months in arrears, while natural gas (and products) generally are paid 3 months in arrears. Oil & gas royalties are paid monthly, consistent with the normal accounting cycle of the producer, unless the obligation does not meet the minimum check requirement for that particular state.