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Tips for successful oil & gas lease negotiation

At its core, negotiating a California oil and gas lease is about protecting your best interests, so the more you understand about the process and your rights as an individual with mineral interests, the more favorable your lease negotiations will likely be. At Ehrlich • Pledger Law, LLP, we have considerable experience helping clients navigate complex oil and gas issues, and we have helped many of them work through complicated lease negotiations and find solutions that best accommodate their needs.

According to SmallBusiness.Chron.com, one of the first things you should do during oil and gas lease negotiations is make sure you have a solid and comprehensive understanding of everything outlined in the lease. It will generally serve you well for the lease to be highly specific in terms of what a company can extract from your land. You also need to understand exactly where and how a company plans to drill, as well as what its rights are when it comes to any water found on your land during the drilling process.

You should also check to ensure that your lease outlines how, exactly, the company looking to access your minerals plans to do so. Does it plan to build an access road that cuts through part of your land? What does it plan to do with the equipment and pumps used to extract minerals from your land once it completes its efforts?

Often, other sections of oil and gas leases address royalties, shut-in royalties and delay rentals. You may, for example, want to include language concerning what would happen if the oil or gas company fails to start drilling immediately, but still wants an interest in your land. You can find out more about your mineral rights on our webpage.

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