The Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease is a legally binding document that allows parties to modify and extend the primary term of an existing oil and gas lease in the state of Illinois. This amendment is commonly used when both the lessor and lessee agree to extend the lease's primary term in exchange for a one-time payment, often referred to as a paid-up extension. Keywords: Illinois, Amendment, Oil and Gas Lease, Paid-Up Extension, Primary Term, Lease. There are various types of Illinois Amendments to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease, and they are differentiated based on specific purposes or provisions. Some commonly used types include: 1. Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term with Royalty Modification: This type of amendment allows the parties to modify the royalty terms specified in the original lease along with the extension of the primary term. It may involve changes such as adjusting the percentage or method of calculating royalties. 2. Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term with Acreage Addition: In this type, the parties agree to extend the primary term while simultaneously adding additional acreage to the existing lease. This amendment is often utilized when the lessee seeks to expand their operations and explore more land for potential oil and gas resources. 3. Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term with Surface Rights Modification: This amendment focuses on modifying the surface rights provisions within the original lease agreement. It may involve granting the lessee additional rights or restrictions related to access, surface use, and environmental considerations during the extended primary term. 4. Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term with Bonus Payment: Unlike the traditional paid-up extension, this type of amendment involves an additional bonus payment made by the lessee to the lessor in exchange for extending the primary term. The amount of the bonus payment can vary based on negotiations between the parties. It is important to note that the specific terms and conditions of each amendment may vary, depending on the negotiations and agreements reached between the lessor and lessee. Therefore, it is advisable to consult legal professionals experienced in oil and gas leases and applicable Illinois laws when drafting or executing an Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease.
Illinois Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease
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FAQ
An oil or gas lease is a legal document where a landowner grants an individual or company the right to extract oil or gas from beneath the landowner's property. Courts generally find leases to be legally binding, so it is very important that you understand all the terms of a lease before you sign it.
In addition to a signing bonus, most lease agreements require the lessee to pay the owner a share of the value of produced oil or gas. The customary royalty percentage is 12.5 percent or 1/8 of the value of the oil or gas at the wellhead.
An oil & gas lease where all payments to keep the lease in effect during the primary term, typically a cash bonus, are paid up front when the lease is acquired. This type of lease generally does not contain a delay rental clause.
There are two terms in a gas and oil lease: known as the primary term and the secondary term. Normally, the primary term is for a specific amount of time which lasts between the period of 1, 3, 5, 7 or 10 years.
The primary term on average is 3 years. Companies can add a 2-year extension if they wish. The company that executed the lease uses this time period to achieve drilling the well. Once that is completed, the secondary term begins and lasts for as long as the well is producing.
Surrender Clause A clause commonly found in an oil and gas lease authorizing a lessee to release its rights to all or any portion of the leased premises at any time and be relieved of further obligations relating to the acreage surrendered.
The primary term is the initial period during which a well may be drilled. If a successful well is drilled within the primary term, the lease will extend for as long as the well remains productive. If a well is not drilled within the primary term, the lease will usually expire.
Negotiating an oil and gas lease will require some research upfront. If you're a landowner interested in working with an oil and gas company, you should explore their history and experience. You'll want to work with a reputable company that works in your best interests, holds a high standard, and maintains insurance.
