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Laura Fitzgerald on Louisiana Life
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Oil and Gas Lease Clauses: Read the Fine Print

By Laura FitzGerald

Oil and Gas Lease Clauses: Read the Fine Print

The size of the words on a page don’t always convey their true meaning.

Oil and gas lease clauses are no different.

There are a lot of moving pieces in oil drilling programs. The amount of equipment, people, and surprises that come with drilling wells is staggering.

This makes oilfield logistics extremely complicated. Managers across the oil patch put in long hours to ensure everything is in the right place. Time is money, so every operator wants to be as efficient as possible.

Sometimes it works, sometimes “the devil is in the details”.

Oil and Gas Lease Clauses: Mise en Place

Mise en place is an oil old french chef’s idiom. It means “putting in place”.

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Filed Under: Oil and Gas Leases

Mineral Leases: Mineral and Royalty Taxes in Plain English

By Laura FitzGerald

Mineral Leases: Mineral and Royalty Taxes 101

You just signed your first of many mineral leases – congratulations!

You have entered into one of the most exciting industries and markets in the world. You’re excited to start collecting royalty payments, and rightfully so.

But, without knowing the ins and outs of the various payments you can receive through mineral leases, excitement can quickly become anxiety.

Mineral Leases: Bonuses, Taxes, Royalties, and More

Oil and gas companies negotiate royalty payments with mineral owners up front. These numbers are included in the language of the mineral leases they execute.

Royalties are calculated as a percentage of the revenue from the minerals extracted from the property. For example, if oil is selling for $60 per barrel and the land owner negotiated a 1/16th royalty, they would receive $3.75 for every barrel of oil recovered from their land.

Royalty payments are subject to federal, state and, sometimes, local taxes. Let’s take a look at a handful of payment and tax scenarios so you can collect royalty payments without receiving collection calls from Uncle Sam.

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Filed Under: Royalty Payments

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