At Ehrlich • Pledger Law, LLP, we understand that emotions tend to run high when oil and gas leases are involved. For prospective sellers, these contracts have the potential to represent a serious windfall. For buyers, they are a major investment. It is natural for nerves to get frayed when this much is at stake.
The oil and gas industry, like many other industries in the United States, is a fine balance between production and overproduction. The risk of oversupply can affect the stability of many oil producers in California as well as across the country. With the importation of oil and gas from other countries, it is critical to keep an eye on local oil companies and how this can affect their ability to survive.
If you are considering whether or not to sell some of your mineral royalties in California, chances are you are going to want to find a buyer who will respect the value of your assets. At Erhlich Pledger Law, LLP, we have considerable experience helping people to make strategic decisions when they are working with oil and gas transactions.
California is a land ripe with many natural resources which result in some of its land being leased out for the sole purpose of harvesting these resources. Some land may be leased from private individuals or corporations while other land may involve leases with the federal government. When the federal government is involved, it may end up paying the state of California royalties.
If someone has approached you with a lease offer for the minerals or the oil on your California land, it is not unreasonable to think the person who is talking with you represents a company that excavates minerals or other natural resources. Sometimes this is the case. However, there is the chance the party you are conversing with is actually farther removed from an actual drilling operation or has no ability to drill at all.
If you are a California landowner, signing a oil and gas lease can be a profitable proposition. However, the negotiation process can be complex and time-consuming. Typically, the proposal to you favors the producer. At Ehrlich, Pledger Law, LLP, we have the expertise and experience needed in negotiating and preparing the lease documents.
When you are dealing with oil and gas transactions in California, a great deal of time and communication will go into creating agreements and implementing protocols designed to protect both parties from being taken advantage of. One of the measures you may use to protect your assets is an operating agreement. The purpose of this negotiation is imperative to your ability to confidently and legally continue doing business with another party.
For many people in California, a decline in the amount they have to pay for gas prices is a welcomed site. People often still discuss how foreign it seems to pay less than $1 for a gallon of gas, but everyone agrees that those days have long since passed. However, what many people may not realize is that a drop in the price of gas has both positive and negative effects.
When you are first starting in the oil and gas industry, chances are you will encounter many learning curves as you gain experience in buying and selling your assets. At Ehrlich Pledger Law, LLP, we have helped many people in California to protect their assets and work through complications with contracts that may have been misinterpreted.
While states like North Dakota may have received a lot of attention in recent years when it comes to domestic oil production, the fact remains that the state of California continues to be a major player in this market. If you are involved in this industry, you will know just how regulated this business can be and how important it is that your company follow appropriate laws and guidelines. For this reason, it is important to have a good understanding of what the Division of Oil, Gas and Geothermal Resources is and what its scope is relative to your activities.