0 – 15 Minutes
Doug discusses the importance of understanding your oil and gas lease and identifying what rights you are granting the gas company in exchange for the bonus payment and promise of potential future royalties. Doug addresses the importance of identifying the rights you are granting the company and the need to restrict those rights or identify the rights given to the company that you cannot restrict.
15 – 30 Minutes
Doug breaks down the granting clause of a form oil and gas lease. Doug identifies what rights the landowner grants the gas company and what concerns the landowners should consider when contemplating entering into an oil and gas lease. Doug discusses perpetual easements, the rights to use your property for ingress and egress to other lands, and the need to identify what granting rights you can restrict or modify and what you should weigh when considering entering int o a gas lease.
30 – 45 Minutes
Doug addresses the implied covenant and duty to drill, produce, or develop. Doug explained shut-in payments and shut-in lease provisions and how companies can cap and shut-in wells to extend leases for many years into their secondary terms. Shut-in provisions are critical as a way for landowners to attempt to require companies to produce natural gas, and are used by gas companies to extend leases far into their secondary terms. Doug addresses primary and secondary terms and explains being held by production for landowners.
45 – 60 Minutes
Doug explains the connection between shut-in provision and implied covenants to drill or develop. The need for landowners to secure strong shut-in language to prevent companies from holding leases by production while no production is occurring. How to avoid having wells capped and shut-in and not receiving royalties. Landowners need shut-in language in gas leases to force development and production both in the early stages and final stages of their gas lease.