Oklahoma Gas Storage Agreement and Lease (Surface and Underground) Description: The Oklahoma Gas Storage Agreement and Lease (Surface and Underground) refers to a legal contract between parties involved in the utilization, operation, and management of gas storage facilities in the state of Oklahoma. This agreement outlines the terms and conditions, rights, responsibilities, and obligations of both the lessee and the lessor in relation to the storage of natural gas. Types of Oklahoma Gas Storage Agreements and Leases (Surface and Underground): 1. Surface Gas Storage Agreement and Lease: The Surface Gas Storage Agreement and Lease pertain to the utilization of above-ground storage facilities for the storage of natural gas in Oklahoma. This type of agreement typically specifies details regarding the operation, maintenance, and rental terms of surface facilities used for gas storage. It may also cover issues related to access, security, and liability for damages. 2. Underground Gas Storage Agreement and Lease: The Underground Gas Storage Agreement and Lease govern the use of subsurface or underground storage facilities, such as depleted reservoirs, underground salt caverns, or aquifer storage zones, for the storage of natural gas in Oklahoma. This type of agreement generally addresses concerns like reservoir capacity, injection and withdrawal rates, pressure limits, and ownership of stored gas, among other critical aspects. 3. Combined Surface and Underground Gas Storage Agreement: Some gas storage agreements in Oklahoma may encompass both surface and underground storage facilities. These combined agreements detail the rights, requirements, and obligations associated with the utilization of both above-ground and below-ground storage options. This type of comprehensive agreement ensures that all aspects and modalities of gas storage are adequately addressed to meet operational and legal considerations. Key Elements of Oklahoma Gas Storage Agreement and Lease (Surface and Underground): 1. Parties Involved: The agreement identifies the lessee (the entity accessing and operating the storage facility) and the lessor (the facility owner or operator) and outlines their rights, responsibilities, and contact information. 2. Duration and Termination: The duration of the lease, including any renewal options, and specific provisions for termination or early termination are addressed within the agreement. 3. Storage Capacity and Rights: The agreement includes details regarding the storage capacity allotted to the lessee and outlines the rights to use, inject, store, and withdraw natural gas. 4. Payment and Rent: The terms and conditions related to payment obligations, rental rates, payment due dates, and potential penalties for non-compliance are outlined. 5. Insurance and Liability: The agreement defines insurance requirements and liability allocation in case of accidents, damages, or any potential environmental consequences associated with the gas storage operations. 6. Access, Maintenance, and Security: Provisions related to access to the storage facility, maintenance responsibilities, security measures, and adherence to safety regulations are covered in the agreement. 7. Confidentiality and Non-Disclosure: The agreement may include clauses ensuring the confidentiality and non-disclosure of any proprietary or trade secret information shared during the course of the agreement. 8. Dispute Resolution: Mechanisms for dispute resolution, such as arbitration or mediation, may be included to address any conflicts that may arise during the term of the agreement. 9. Governing Law: The agreement specifies the governing law under which any disputes or legal issues regarding the agreement shall be resolved. In conclusion, the Oklahoma Gas Storage Agreement and Lease (Surface and Underground) regulates the contractual relationship between lessees and lessors regarding the utilization, operation, and management of gas storage facilities in Oklahoma. Different types of gas storage agreements exist, including surface, underground, and combined agreements, each addressing specific requirements related to storage location and operational modalities.
Oklahoma Gas Storage Agreement and Lease (Surface and Underground)
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The value of mineral rights per acre differs from state to state. Typically, the price ranges from $100 to $5,000 per acre in several states.
Without any royalty income it comes down to what buyers think the future income might be. For non-producing properties, the Mineral Rights Value in Oklahoma could be anywhere from a few hundred dollars per acre to $5,000+/acre. It really depends on which county your property is located in.
Usually the potential buyer will break down your ownership into net royalty acres which are the net mineral acres you own normalized to a 12.5% royalty. Also understanding the terms of the lease including when the lease expires and if there is an option to extend the lease can affect the value.
As a mineral rights value rule of thumb, the 3X cash flow method is often used. To calculate mineral rights value, multiply the 12-month trailing cash flow by 3. For a property with royalty rights, a 5X multiple provides a more accurate valuation (stout.com).
If you collect royalty income of $100,000, you could pay $30,000+ in taxes and only keep $70,000 and it would takes years to collect. Your basis in mineral rights can affect how much tax you owe when selling mineral rights vs collecting royalties. If you inherited mineral rights, it nearly always makes sense to sell.
Are mineral rights considered real property in Oklahoma? The severability and fractionalization of Oklahoma mineral rights create a rich trove of mineral rights opportunities across the state. Since mineral rights are treated as real estate in Oklahoma, these rights are considered real property.
The statutory minimum is 1/8th or 12.5%, but it may be as high as 1/4th, or 25%. Since the 1990s, Oklahoma royalties have typically been at least 18.75 percent, but 20 to 25 percent is not unheard of for Oklahoma mineral owners.