Introduction
Oil and gas are valuable commodities. Their presence beneath your land could mean extra income if you choose to grant a lease to an exploration company.
Exploration companies employ or contract with a professional called a “landman” to acquire leases of mineral rights to land with potential reserves of oil and gas. Not all landmen work for exploration companies. You may have already been approached by a landman who has asked you to sign a lease that allows a company to drill on your property. If you are approached, consider the offer; revenue paid to owners of leased land can be substantial. Risks and inconveniences, however, are also possible. Make sure the lease protects your interests.
What is a Lease?
A lease is a legal document or contract between a landowner (lessor) and a company or individual (lessee) granting exploration and development rights to subsurface oil and gas deposits. Companies will usually present you with a pre-printed or standard lease. Review it very carefully and consult an attorney or other professional who is experienced with oil and gasleases. Negotiate changes to meet your needs and protect your interests before signing. Get all agreements and conditions in writing. Entering into a lease agreement does not necessarily mean a well will be drilled on your property. Also, remember that you are granting a right to others which may be viewed as an encumbrance on the property.