Ohio Oil, Gas, and Mineral Lease (SGML) is a legal agreement that grants the rights to extract and explore oil, gas, and minerals from a specific property located in the state of Ohio. It provides the lessee (the company or individual) with access to underground resources in exchange for financial compensation, typically in the form of lease bonuses and royalties. An SGML outlines various terms and conditions related to the lease, such as: 1. Primary and Secondary Terms: The primary term determines the initial duration of the lease, usually a fixed number of years. Once the primary term ends, the lease may continue into a secondary term as long as certain conditions (such as the production of hydrocarbons) are met. 2. Grants and Reserved Rights: The lease explicitly specifies which minerals are included in the agreement. It could cover oil, gas, coal, limestone, sand, gravel, or other valuable substances. It may also reserve certain rights for the landowner, limiting the lessee's access to specific areas. 3. Royalties and Bonuses: Lessees typically offer a lease bonus, which is a one-time upfront payment made to the landowner upon signing the lease. This is followed by royalty payments, which are a percentage of the value of extracted resources that the landowner receives on an ongoing basis. 4. Drilling and Production: The SGML establishes guidelines for drilling and production, such as the permitted methods, environmental regulations, safety measures, and obligations related to well maintenance and reclamation. 5. Surface Usage and Access Rights: The lease specifies the rights and restrictions regarding the use of surface land for drilling operations, pipelines, access roads, and related infrastructure. It may also include provisions for compensation to the landowner for surface damages. 6. Assignability and Extension: Oils often allow the lessee to assign or transfer the lease to other companies. They may also include options for lessees to extend the lease for additional periods if certain conditions are fulfilled. In Ohio, there are primarily two types of SGML: 1. Standard Ohio Oil, Gas, and Mineral Lease: This is a traditional lease agreement where the lessee has the rights to explore, extract, and produce oil, gas, and minerals from the leased property. It follows the general structure and terms discussed above. 2. Ohio Oil, Gas, and Mineral Lease with Hydraulic Fracturing: With the advancement of hydraulic fracturing (fracking) technology, specific Oils have been developed to address the unique considerations and risks associated with this extraction method. These leases may include additional clauses related to chemical disclosure, water usage, seismic monitoring, and indemnification. It is important to note that the terms and conditions of an SGML may vary depending on negotiations between the parties involved, the particular property's characteristics, and legal and regulatory requirements. Seeking professional advice and conducting due diligence is crucial while negotiating an SGML to protect the interests of all parties involved.
Ohio Oil, Gas and Mineral Lease
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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.
If the lessee is engaged in drilling operations at the expiration of the primary term of the lease,[9] the lease term will be extended for an additional two years if certain requirements are met. [10] Actual drilling operations that penetrate the earth are required.
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 Term of Your Oil and Gas Lease As a starting point, the typical term of an oil and gas lease in West Virginia, Ohio, and Pennsylvania is 5 years. The time starts on this 5 years on the date you sign your lease (even though you will likely have to wait 120 days or more to receive your bonus payment).
If you have a property that does not currently produce royalty income and you do not have an active lease, the value is nearly always under $1,000/acre. The average price per acre for mineral rights that are not leased is between $0 and $250/acre.
A mineral lease is a contractual agreement between the owner of a mineral estate (known as the lessor), and another party such as an oil and gas company (the lessee). The lease gives an oil or gas company the right to explore for and develop the oil and gas deposits in the area described in the lease.
A mineral lease is a contractual agreement between the owner of a mineral estate (known as the lessor), and another party such as an oil and gas company (the lessee). The lease gives an oil or gas company the right to explore for and develop the oil and gas deposits in the area described in the lease.
We Buy Mineral Rights Throughout Ohio If you are interested is selling all or a part of your mineral rights in Ohio, Bluerock Minerals will get you a top dollar offer. Call us for your no obligation offer at (844) 944-2583.