Proposed Oil _ Gas Lease with ConocoPhillips .pptx

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					Proposed Oil & Gas Lease with
       ConocoPhillips

  vNo such thing as a standard lease-
  every lease is different but contains
     basically the same provision
     What is an Oil & Gas Lease
vIt is both a conveyance and a contract
vconveyance=right to explore minerals
vcontract=oil company accepts the right to
 explore and may payments and meet other
 conditions
vLessor=Watkins Farm HOA
vLessee-ConocoPhillips or assignee
             Consideration
vBonus payment
vRoyalty on production (cost free of
 production)
vBonus payment not contained in lease;
 separate order for payment
             Granting Clause
v Paragraph 1 of preprinted lease
vGrants ConocoPhillips the right to explore,
 develop, produce and transport oil, gas other
 hydrocarbons
vGrants ConocoPhillips the right of ingress and
 egress on property
vNOT APPLICABLE FOR THIS LEASE- this is NSO
 (no surface occupancy) Exhibit A. para. 3
            Land Description
vParagraph 1 describes both parcels;
v 11.2 acres
v 1.59 acres
v NSO applies to both parcels
v Mother Hubbard Clause-lease provision to
 ensure that the lease includes all the lands
 owned by HOA which were intended to be
 included but which were unintentionally
 omitted.
                Lease Term

v Three years or so long as there is production
vProduction will be determined from a lease
 that is pooled with Watkins Farms HOA’s lease
            Royalty Payments
vParagraph 3-clause specifies how much of the
 production is to be delivered to lessor free of
 cost.
vProvides for payment of “shut-in” payments=
 $5.00 per acre
vShut-in payments = when gas production is
 not sold
                  Pooling
vParagraph 5
vPooling rights granted by this Lease
vBased upon Lessee (ConocoPhillips) judgment
 that pooling is required to properly operate
 the lease
vTo promote conservation of oil and gas
vUnitization paragraph 6- pooling with federal
 minerals/not applicable
                Warranties
vNo warranties of any kind
vParagraph 9 stricken from pre-printed lease
vParagraph 4 of Exhibit A
             Breach of Default

vParagraph 13 of preprinted lease
vStricken provisions that allow extended time
 to cure a default or breach
vStricken provision of limitation to damages as
 FMV at time of lease
                    Option
• Option granted for extension of years at
  $2,250 per net mineral acre (paragraph 15)
• Stricken right of first refusal (paragraph 16)
                 Indemnity
• Paragraph 2 of Exhibit A
• ConocoPhillips or assignee is responsible for
  all claims and damages arising from their
  operations and or violation of any laws,
  including environmental laws
• Including all attorney’s fees
              Other options
q Do not do anything- hope you do not get
 forced pooled and that your acreage is not
 necessary for drilling
qIf forced pool may not get bonus money
qIf forced pool you will not get the NSO
qSell your minerals- Anadarko offered to
 purchase minerals
qLease your minerals to another company –
 Anadarko is also interested in leasing

				
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posted:2/20/2014
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