Do you have someone interested in obtaining an oil lease or a gas lease on a piece of land that you own or partly own? This could be a significant source of income for you in the future, but you need to make sure that you get a good deal. You’ll also want to make sure that leasing the piece of land is right for you. Here are a few things that you should think about before you agree to any oil lease or gas lease deal.
First, figure out if there is anyone else who should be contacted about the question. Even if you are the sole owner of a piece of land, there may be other people who have interests in the property. If there are other family members who own part of the land, who have been promised the land, or who have any other sort of interest there, make sure that you speak to the oil or gas company together.
Next, figure out exactly who you’re talking to. You may be speaking with a broker, hired by an oil or gas company who wants to research and drill on your land. You may also be speaking to an employee of the company. Some larger companies have folks in-house who handle all of their leasings. Finally, you might be working for a middleman. These people may be hired by brokers, or directly by the oil and gas company.
Make sure that you get all of your paperwork together. You will need to prove that you own the piece of land before you can even talk about leasing mineral rights. You may have deeds, maps, wills, leases, easements, and more. All of these will become relevant when negotiating a lease deal with an oil and gas company.
You want to do your research before you sit down to hammer out a lease. This involves learning about the company, including the person who contacted you. You will want to see if you can find any information about drilling or current wells in the area. You can usually go online and find recent drilling permits and more information about what exactly would be taking place on your land.
You may also need to create a new business to handle this lease. Once the lease is signed, you will be eligible for bonus payments and even royalty payments to whatever name is listed on the lease. It may be easier to deal with this money and its distribution in the future if you simply create a new corporate entity to receive these payments.
In the end, it’s up to you and your family to decide if an oil lease or it gas lease is right for you. These can be lucrative, but they can also be controversial. If you want to use the land being drilled on, for instance, that may be difficult with all of the heavy machinery involved in drilling. However, you may be able to work around them. Make sure that you and your family agree before you negotiate any of these.