Owning a plot of land presents you with many different opportunities. One of those opportunities could be to potentially lease your oil and gas minerals. In most situations, oil and gas companies will seek out the property owner if they believe there’s a possibility of extracting valuable minerals from the land. At that point, the owner must decide whether leasing mineral rights from the property is a good idea. It’s easy to jump into a deal and sign a contract when you see the potentially lucrative offer, but this isn’t usually the best way to proceed. Here are some tips for landowners interested in leasing their Oklahoma minerals.
Don’t Rush Into Signing A Contract
If an offer looks too good to be true, it probably is. When you rush into signing the first offer you get, chances are you’ll regret at least some aspect of it in the future. So when you get an offer from a company, you should see it as a sign that other companies may be interested in making you an offer as well. This gives you more negotiating power and will ensure you get the deal that makes the most sense for you. Nevertheless, it can backfire to shop a deal for too long, and you could potentially lose that offer. These contracts for leasing mineral rights can span for several years, so flushing out all the details upfront will prevent negative surprises from arising.
One thing to keep in mind is Oklahoma is a forced pooling state. As the mineral owner, if you refuse to lease your minerals, you are subject to forced pooling, and therefore revoke your option to negotiate your terms. Then the oil and gas company will select the terms best suited for them. You can avoid this by simply selecting the best option presented to you by the oil and gas company. An alternative is to lease or sell your mineral rights to investment companies, private investors or others interested in your oil and gas minerals rights.
Hire An Attorney At The Appropriate Time
When leasing mineral rights, it’s almost always recommended to hire an attorney to review the leasing agreement. However, you don’t want to hire one too early in the process and incur unnecessary attorney fees. Do your research on the companies first and evaluate the offers to the extent you can based on your knowledge. Then once you have a few offers you’re interested in, take them to an attorney to evaluate the contracts, make modifications and explain exactly what’s in the contract.
Understand Every Aspect of A Contract Before Proceeding
It’s vital for a landowner to understand every piece of language in a contract when leasing oil and gas minerals. You should never assume the company is responsible for damages to your property. If you own the surface rights, you should also know what happens with surface rights as part of the contract. The royalties often take precedence in any discussion about a leasing agreement, but you must also make sure your land is taken care of as well. And always get agreements in writing so they are legally bound.
Eckard Land & Acquisition is dedicated to protecting landowners who are interested in leasing mineral rights. Every lease is complicated and requires high-level knowledge and expertise to analyze and evaluate agreements. We are here to help ensure all of your bases are covered and you come to an agreement that benefits you now and in the future. Don’t hesitate to contact us at any time if you’re interested in leasing your Oklahoma minerals and need some guidance.