If you have or potentially have oil or gas reserves on your land in California, you may believe that you have “struck it rich.” And that may be the case. Your land could hold a substantial reserve of oil and gas that is viable for production. A well or group of wells could produce for many years, and they could add greatly to your income and your overall wealth.
A potential lessee may present you with a long and detailed offer of an oil and gas lease. However, unless you already have years of experience with these types of lease contracts, you should be careful before accepting any agreement. Mineral leases can be very complex, and most operators may have decades of experience with exploration, drilling and production, while landowners may have little experience with these matters.
While a steady stream of income from a producing well or field may be very attractive to most landowners or holders of mineral rights, you need be certain you fully understand every element of the oil and gas lease. It is nominally a contract, but it is a contract in a specialized area of law, so you may need to consult with an attorney experienced with these types of contracts.
You should always take the time to go over all the documents that may make up parts of the lease; never simply agree to the first offer you receive. The driller has no obligation to offer you a good deal and may attempt to capitalize on your inexperience or naiveté with regards to these complex legal documents.
Take your time and work with an attorney who can effectively represent your interests. The oil or gas on your property is not inexhaustible and you want to receive the best possible return during the period of its production.