One of the most common questions we get to hear in today’s age is how to sell oil & gas leases? This is because landowners have realized that there is more to the land than its surface and they can make a fortune by selling mineral rights and oil and gas leases to oil companies and extraction companies that will process those minerals and sell them in the market.
The easiest way a landowner can benefit from the mineral resources in his land or property is to sell oil & gas leases. By doing so, they receive either an oil and gas royalty, which is a percentage of the total income of the oil company. This percentage could vary depending upon the lease and the kind of property and how rich it is in oil and gas. The second type of monetary benefit landowners receive is in the form of a fixed amount at the beginning of the lease. While royalties ensure regular and continuous payments, the other gives a hefty sum at the beginning that the landowner can invest elsewhere. However, it is not an easy process to sell oil & gas leases because the process is challenging and technical.
There are various laws and regulations that govern transactions of selling and purchasing mineral rights and oil and gas leases. These laws differ from state to state but the government likes to keep some rights on the minerals, oil and gas found in the land regardless of who owns that piece of land or property. This is precisely why both the parties – the one selling and the one purchasing must be aware of the laws of their particular state pertaining to purchase and sale of oil and gas leases.
The rest of the process is relatively straightforward and involves the landowner signing a lease with a lessee who promises a certain amount of payment at the beginning of the contract or a royalty for the oil and gas. Since the lessee is unaware of the kind of oil or gas that a certain land holds prior to extracting it and signing the lease, they usually pay a particular fee to lease the land instead of purchasing it.
In this way, they do not have to spend extravagant amount to own the land but can still benefit from the oil and gas reserves in the land. On the other hand, the landowner can earn extra capital without even having to transfer the ownership of the land. Moreover, they can sell the oil and gas lease again once the time duration of the current lease is over. This way, they can earn capital over and over again.
Moreover, if the land is rich in minerals or oil and gas reserves, usually leases are extended, which benefits both the landowner and the lessee. However, the landowner needs to do extensive research of the market before deciding which oil company to give their lease to in order to benefit from the best deal. More Read
No comments:
Post a Comment