This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
The Delaware Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor is a legal provision commonly found in oil and gas leases. It grants the lessor (landowner) the option to purchase a portion of the oil, gas, or other mineral production from their property before the lessee (oil and gas company) can sell it to a third party. This right is often exercised when the lessor believes that the production has significant value or potential. The Delaware Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor serves as a protective measure for lessors, ensuring they can benefit directly from the development of natural resources on their land. It also allows lessors the opportunity to become active participants in the production and potentially increase their earnings. There are different types of Delaware Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor, including: 1. Fixed Percentage Reservation: In this type, the lessor reserves a specific percentage of the produced resources. For example, the lessor may choose to reserve 25% of the oil and gas production. 2. Fixed Quantity Reservation: Rather than reserving a percentage, the lessor may opt for a fixed quantity of production. For instance, they may reserve the first 1,000 barrels of oil or 10,000 cubic feet of gas extracted from their property. 3. Delayed Reservation: This type allows the lessor to defer their preferential right until a specified point in the lease, such as after a specific volume of oil or gas has been produced or a certain period of time has passed. 4. Variable Percentage Reservation: In some cases, the lessor may prefer to introduce a variable percentage reservation. It means the percentage of production they can call upon may change over time or be tied to particular conditions, such as market prices or total production volumes. The Delaware Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor is vital because it empowers lessors to protect their interests and have control over the revenue generated from their property's natural resources. By exercising their preferential right, lessors have the opportunity to capitalize on the booming energy industry and potentially negotiate better terms with lessees.
