About Oil Leases

To the Editor:

Are we ready for it? Probably not. Every mineral owner needs to prepare for it now. You can do this by examining your previous oil, gas and mineral lease.

If you have or have had oil or gas wells on your land and still receive checks, that’s good for you. Just make sure that the current production is not holding, or attempting to hold, more acreage than the amount of production required by law. Example; a well producing a daily average of 60 bbls./day can only hold 80 acres (or less depending on the field rules). If you have not had any checks for production in more than 90 days, your Lease is likely over. Check it and see. If so, you can file an ‘Affidavit of Non-production’ and this will let the landmen at the courthouse know that you have open acreage. This is also a remedy for acreage not held by production. Don’t be afraid to see for yourself, it’s yours.

You must keep an eye on these oil companies. They will try sending a small check without sufficient production to hold your lease and sell it to someone else and make more royalty than you, without actually being entitled to it. Never trust any of them. If they rip you off, all the Railroad Commission or the State will tell you “is that it’s a civil matter.” Then you have to hire a lawyer and sue. A costly adventure at best. So, now is the time while you are in charge and in control.

Also remember most of the local lawyers work for them. Check with your neighbors and compare the deals they are offering them. Remember that $1,000/acre and 72.5% (your part 27.5%) is just a starting point in the negotiation. Never assume that oil companies or lawyers won’t take more than they should of your money. They will.

Take your time and examine the whole long term deal they offer, it may be for the rest of your life.

J. Moerbe Nelsonville