Essentials To Take Care Before Signing Your Lease Document

A visit by an oil and gas company spells money! If you possess mineral rights to your property and if your property possesses oil or minerals of substantial worth there are chances for you to break a good handsome deal in exchange of the mineral rights on an oil gas lease.

However, before you sign the dotted line, take care of the following points:

- Check out the antecedents of the oil and gas company.

- Hire a local oil and gas attorney conversant with the state laws regarding the lease.

- Check with your neighbors who might have already struck oil in their properties and get the local rates obtainable for the bonus value and the royalty.

- Be prepared for tough negotiations in order to obtain favorable terms pertaining to the initial term, the bonus and the royalty. Make sure you are suitably indemnified against any accidental loss to your movable and immovable properties.

- Sign only the oil gas lease and not the other minerals.

Basics of crude oil demand

USA is one of the prominent names for crude oil buyers all over the world. According to an estimate, USA alone produced around 9 million barrels of crude oil per day in 2005 and yet exported more than13 million barrels every day from other countries!

Considering that US is one of the numerous crude oil buyers, the figures are an eye opener as regards the massive oil consumption per day worldwide. In addition, exploration for newer natural gas well drilling opportunities is ongoing.

If you have watched movies and TV shows including ‘Giant’ and ‘Armageddon’, you may already have an impression of how natural gas well drilling works. It’s an elaborate process and very expensive too.

The thick black oil extracted out of natural gas well drilling is the crude form of gasoline jet fuel, kerosene and natural gas. It is also used to manufacture items like tires, crayons, synthetic fibers et al. Hence, many companies are also avid crude oil buyers.

Exploit Your Shale Mineral Rights

Rising prices of oil and gas has made it highly attractive for shale mineral rights owners to commercially exploit their rights. Earlier, a major impediment was the lack of appropriate technology to carry out horizontal drilling in impermeable rocks. This has now been overcome with the introduction of hydraulic fracturing. Barnett shale is a pathbreaker for Woodford and Fayetteville shale. Barnett shale is a formation of sedimentary rocks in the state of Texas. It stretches from Dallas to the city of Fort Worth. Oil mineral rights have always yielded a bonanza for property owners in states like Texas.

Now, with the boom in shale gas and the likelihood that the US has enough shale gas to last a century, landowners are currently enjoying an unprecedented surge of interest in the sale and lease of shale mineral rights. Even basins neglected earlier due to low economic potential are now attracting customers on account of revised estimates. The mineral is estimated to significantly contribute to the economy.