Oil & Gas Leasing Fact Sheet
Colorado Oil and Gas Lawyer
Mining companies often do not want to purchase a property that contains
gas or oil because they are uncertain about the amount or quality of gas
or oil that exists there. As an alternative, they may agree to
lease the mineral rights or a portion of those rights from an individual party.
A lease is essentially an agreement that gives a mining company the right
to enter a property and conduct tests to determine if sufficient minerals
exist there. In order to acquire this right, the company pays the owner
of the property a certain amount of money at the time the lease is signed.
This money "reserves" the property for the company's use
for a specific period of time.
When minerals are obtained from a leased property, the landowner is typically
paid a share of the income that comes from production. This share is called
a "royalty payment". The royalty amount that a landowner receives,
and the way in which the royalties are paid, depends upon the
lease contract that has been agreed to between the land owner and the mining company.
In signing a lease with a company, a landowner must anticipate the activities
that the company will engage in when exploring the property, such as drilling
and opening excavations. Determining what activities are acceptable is
part of a strong lease agreement. If you require further information about
oil and gas leasing, contact a
Colorado oil and gas lawyer who will be able to answer your questions and provide you with legal advice.
Oil and Gas Attorney in Colorado
At Feldmann Nagel Cantafio PLLC, we provide legal assistance to individuals who
require help in matters related to the leasing of oil and gas rights.
Contact a Colorado oil and gas law attorney
for help or information regarding the lease of oil and gas rights.