If you own these natural gas rights you may lease the right to explore for gas to a company that has the equipment and expertise to recover or receive the gas for a period of time, and to accept payment for the lease and royalties for the value of the gas.
Why do oil and gas companies want to lease the land?
Oil and gas exploration companies generally want to hold the leased mineral rights for a period of years until they actually begin drilling. This could be because the price for natural gas is down, or their rigs are operating elsewhere, or for any number of business reasons.
Can a gas company offer you a preprinted lease?
To save time, gas companies may offer a preprinted gas lease. You can accept this lease, reject it, or use it as a starting point for negotiating. You can make changes to the lease by creating one or more addenda that are approved by both parties. Don’t feel pressured to lease your land for natural gas exploration and drilling.
How much money can you make leasing mineral rights?
Keep in mind that the amount of money you stand to make leasing your mineral rights can often exceed the value of the surface rights to your property. In a year you could earn over $100,000 just in royalties from oil or natural gas production.
How are oil and gas companies paid for leases?
It goes like this: Gas companies and landowners sign a lease agreement before drilling begins. The royalty is money paid to the mineral owner, like Clark, for the right to use his resource. It’s negotiated to be a certain percentage of the revenue from the sale of the gas. Clark is leased to a company called Chief Oil and Gas.
How does a landowner sign an oil and gas lease?
Once the lease is signed by the landowner, the lease is then given to the landman who takes it to the oil and gas company. The oil and gas company will then have a certain period of time, which is usually set forth in the order of payment, to review and accept or reject the lease.
