What Do I Need to Know Before Allowing a Gas or Oil Company to Lease my Property for Drilling?

Unless you have extensive experience negotiating oil and gas leases, you need to retain an attorney who understands the complex Oklahoma and federal laws governing them. Without skilled legal representation, you can lose valuable rights — or even run the risk of breaking the law.

The laws pertaining to oil and gas leasing extend well beyond the typical issues of property or contract law. The following considerations represent a small sampling of the concerns cited by the Oklahoma Bar Association:

  • Ownership. You may own the land above oil or gas. However, although you have the exclusive right to extraction, you do not actually own the resources until they are brought to the surface.
  • Property lines. You have the right to drill as many wells as you want, even close to neighboring property lines, but well spacing limitations can prevent drilling near an existing well on that property. Additionally, your lease automatically implies that the company must protect you from drainage into nearby neighboring wells.
  • Rights granted. Although your contract may grant limited rights to the gas or oil company, Oklahoma law grants the exclusive right to take. This right can lead the company to take more liberty with your land than you expected.

Since Oklahoma has the second-largest number of crude oil wells and the third-largest number of natural gas wells in the United States, most local attorneys have some degree of experience assisting clients with leasing issues. However, to develop a lease that truly protects your interests, you need to seek guidance from skilled oil and gas attorneys who have thorough knowledge in this specialized area of the law — and stay current with statute changes at the state and federal level.

The law firm of Eller & Detrich, A Professional Corporation provides legal services to an impressive list of oil and gas companies. We have a clear understanding of the complex issues involved in oil and gas leasing, and we can support individuals on both sides of these contracts. Contact us to learn how we can help.

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