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Oil & Gas Lease Negotiation: Statutes & Practice Guides

A research guide to Oil & Gas Law for law students, bar examinees, and other researchers.

Definitions

Abstract of TitleA concise statement, usually prepared for a mortgagee or purchaser of real property, summarizing the history of a piece of land, including all conveyances, interests, liens, and encumbrances that affect title to the property. 

Bonus: A payment that is made in addition to royalties and rent as an incentive for a lessor to sign an oil-and-gas lease.

Dry Hole: – An oil or gas well that is incapable of producing enough minerals to justify the cost of completing it and putting it into production.

LandmanA person responsible for acquiring oil and gas leases, negotiating arrangements for development of leases, and managing leased properties. In this field, both men and women are commonly known as landmen.

Landowner: Someone who owns land.

Landowner’s Royalty: A share of the product or profit from real property, reserved by the grantor of a mineral lease, in exchange for the lessee's right to mine or drill on the land.

Mineral Lease: A lease in which the lessee has the right to explore for and extract oil, gas, or other minerals. The rent usually is based on the amount or value of the minerals extracted.

Mineral InterestThe right to search for, develop, and remove minerals from land or to receive a royalty based on the production of minerals. Mineral interests are granted by an oil-and-gas lease.

Surface Interest: Every right in real property other than the mineral interest. • The surface-interest owner has the right to the surface subject to the right of the mineral-interest owner to use the surface. The surface-interest owner is entitled to all whatever nonmineral substances are found in or under the soil.

Working Interest: The rights to the mineral interest granted by an oil-and-gas lease, so called because the lessee acquires the right to work on the leased property to search, develop, and produce oil and gas, as well as the obligation to pay all costs. 

All definitions are from Black's Law Dictionary (11th ed. 2019).

Primary Sources--Acts

Primary Source--Statutes--Federal

Primary Source--Statutes--State

Primary Source--Regulations--Federal

Primary Source--Regulations--State

Primary Source--Case Law