The Oil And Natural Gas

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Everyday oil and natural gas is being found in new areas and being sought after by companies who want to drill for and use those resources. More often than not these resources are under land already owned by someone else so the companies must come to an agreement with the landowner in order to get permission to drill for the oil and natural gas. Oil and gas are valuable commodities for landowners and can mean an extra income. Instead of selling the land and completely giving up their stake in the potential fortune most owners decide to negotiate a lease with the company in which both parties benefit from the resources. Just because someone owns a piece of land does not mean he or she has the right to set up a lease for the drilling of…show more content…
A landman (or woman) is a person whose job it is to secure leases on as large an area as possible and they are either employed by oil and gas companies or work independently. Because these men and women are professionals and are trained in the art of making sells using all possible tactics, it is usually advised that landowners seek an attorney or some type of professional to assist in the negotiations. A lease in this context is a legal document or contract between a landowner who is the lessor and a company (or individual) who is the lessee that grants the lessee rights to exploration and development rights to potential subsurface mineral commodities. Today there is no standard oil and gas lease form. At one point the “Producers 88” form was considered the standard form but today various oil and gas companies utilized several different types of lease forms as their starting point for negotiations. Generally their are two broad types of oil and gas lease forms based on the timing of the lease bonus payments. The most commonly used type is the “Pay-Up” lease which no bonus payments are due after the signing of the lease, instead the lessor gets one hundred percent of the lease bonus money combined with annual rental payments up front. The other type is the “Rental Lease” that is not as commonly used in which the lease, can lapse if the rentals are not paid in a timely manner by the company which would ultimately result in the termination of
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