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Black Gold....Texas Tea
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Mike SE IL
Posted 7/28/2009 23:25 (#792069 - in reply to #791929)
Subject: RE: Black Gold....Texas Tea



West Union, Illinois

Remember, a lease is a contract and all contracts are negotiable.  Sometimes the negotiation involves one of the parties saying no.

The first thing I would say is pay for your own product preparation, I'm not paying for ANY of the expenses and especially am not paying 1/8th of them.

I have a list of several items that need to be addressed in a gas lease.  An oil lease might have more.  Here are a few paragraphs to consider asking for:

The Lessee acknowledges that there is or may be fresh water under the surface of leased premises which may be used for domestic use as well as commercial farming and irrigation and that it is absolutely essential that such fresh water be carefully protected from any damage that might otherwise result from Lessee’s operations hereunder. Lessee shall be responsible for all damage caused by such Lessee to any water wells or any fresh water supply or source of the property and subject to injunctive relief. Lessee shall not discharge produced water on or near the surface without Lessor’s written consent.

(Aww, not necessary, the law covers that"  Fine then this should not be a problem adding it to the agreement)

Lessee shall comply with all federal, state, and local laws, ordinances, regulations, including environmental and pollution control requirements, and shall abstain from committing any waste, unnecessary damage, or the deposit or storage of any materials, supplies, junk or litter on the lands; and shall conduct Lessee’s operations under this lease in accordance with the highest standard practices in the industry.

(keeps you from becoming their junkyard)

No assignment of this lease by the Lessee, in whole or in part, shall relieve or discharge the Lessee from liability for any covenants hereunder, including particularly the obligation to plug out the lease and restore the premises upon termination of this lease, but Lessee named above shall remain as a guarantor of performance of all covenants and obligations of the Lessee hereunder with regard to plugging, cleanup, and restoration upon termination of this lease notwithstanding the assignment.

(What happens, at least in SoIL, is big time company gets the lease and runs it a few years.  Starts to become less profitable so they sell to not so big time oil company who eventually sells it to Joe's oil development and junk car removal.  Comes time to clean up the lease and guess what?  Joe filed bankrupcty and you are stuck with it. )

 

 

 

All sub-surface electric lines and oil, gas and water pipelines installed by Lessee and to be located on the leased lands shall be at least 48 inches below the surface on cultivable land and 36 inches below the surface on non-tillable land. Lessor and farm operators working on the Lessor’s behalf shall not be held responsible for damage to sub-surface electric lines and oil, gas and water pipelines during normal cropping operations.

(Dad absolutely refused to sign any lease without that last senence or something very similar to it in the lease.)

 

 

 

Any and all roadways that are constructed by Lessee on the leased lands will be built consistent with typical farming practices in that they will be constructed either parallel and/or perpendicular to typical crop row configuration. ) No access roads shall be used on Lessor's property to access a drill site on a neighboring property without Lessor’s consent. Lessee shall, prior to commencement of its operations, submit to Lessor a map or maps showing the proposed location of well sites, roads, and pipelines on Lessor's property. Lessor, within five (5) days after receiving such map, maps, or permit, shall inform Lessee whether such proposed locations as set out hereinabove will interfere with Lessor's use of the real estate. If so, Lessor shall provide alternate location that is a reasonable and acceptable location to Lessee. Receiving shall be defined as Lessor having such map, maps, or permits in hand and able to comprehend and make suitable judgment on the matter. Lessor's failure to object to the approval of said location within the time frame set herein above shall NOT be deemed an approval and/or acceptance of said location by Lessee. Lessee agrees to pay Lessor $300.00 annually per 1/4 mile of land used for access roads. Payment is due by the last day of each year. Lessee agrees to maintain and repair any preexisting access roads used by Lessee for drilling activity. The Lessor and owner of the surface will have the right to use the leased roads for farm use without responsibility for maintenance of such leased roads. At the Lessors request the Lessee shall at the Lessee’s expense put crushed limestone on roads that receive considerable use and tend to develop ruts.

(Oil field jockeys will try and get away with ANYTHING.  Spell it out and enforce it)

It is hereby agreed between the parties hereto that following Lessee's operations on said lands, Lessee shall be responsible for promptly restoring the surface of the land that was disturbed by said operations, to as near its original condition as is reasonably possible. Lessee will not use or allow used drilling methods that require any pits, holes, ponds or other underground containment facilities or structures, or nor will the lessee construct such or allow them to be constructed by subcontractors. Lessee agrees to haul away sludge, lubricant, stem lubricant, salt water, or drilling mud.

If the owner of the surface runs livestock on the property leased, upon written request by Lessor, Lessee, at its sole expense, shall enclose with an adequate fence all equipment and excavations, and immediately repair any fence cut by Lessee and immediately install cattle guards or steel gates to make the operations and access stock proof.

 

  (Note the word immediately.   We have a few lines we include about irrigation that include immediately in them as well. This lease may go on for 50 years or more.  Plan ahead now)

 

A portion of the leased premises is or may be in the future improved with an agricultural irrigation system; Lessee agrees that its operations on the premises shall be conducted in a manner compatible with the efficient operation of Lessor's irrigation system. Although, the Lessor's right in this regard shall be paramount in the critical agricultural crop growth period from April I to September 30 of each year, Lessor shall cooperate with Lessee in a reasonable manner. The Lessee shall in no manner interfere with the operation of any existing or future irrigation system, nor shall Lessee engage in any practice which shall affect the fresh water supply for the irrigation system..

 

 

 

 

 


 

 

 

 

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