Somebody wants me to sign an oil and gas lease. Should I sign one, and what do I need to know before I do?

Published 06/16/2009 07:13 AM   |    Updated 03/09/2010 10:59 AM
Somebody wants me to sign an oil and gas lease. Should I sign one, and what do I need to know before I do?

Many landowners have benefitted greatly from the production of oil and gas on their property. Others have been disappointed. Some may even wish they had never leased their property or that they read the "fine print" more closely before signing the original lease.

The decision to lease your property for oil and gas production should be made only after you carefully review the proposed lease documents. Be certain to understand the terms and conditions and the implications to you and your heirs. Once production commences, an oil and gas lease might remain valid for many years into the future and it is important that you are comfortable with the idea of committing to an activity that may exist for many generations.

Another thing to remember is that sometimes a property that is being purchased may already be subject to a previous oil and gas lease which remains valid even after the property is purchased by a new owner. As with any transaction or contract involving real property, it is strongly recommended that landowners consult with an attorney experienced in oil and gas leasing matters before signing any lease documents.

Except in rare situations, the Division of Oil and Gas does not become involved whatsoever in the process of leasing property for oil and gas production. This is strictly a private, contractual matter between the parties involved.

For a listing of other Web sites with resources for oil and gas leasing information that may be of interest to landowners, select Links from the menu on the Division of Oil and Gas home page. These sites should only be relied upon for general information regarding oil and gas leasing. Again, all landowners are strongly urged to consult with an experienced oil and gas leasing attorney before making any final decisions with respect to oil and gas leasing.

Was this answer helpful?
Your rating has been submitted, please tell us how we can make this answer more useful.