Tennessee Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease is a legal document that allows parties involved in an oil and gas lease agreement to extend the primary term of the lease by making a paid-up extension. This amendment is crucial when the original lease is nearing its expiration and the tenant wishes to continue exploiting the land for oil and gas exploration and production purposes. In Tennessee, there are several types of amendments to an oil and gas lease for a paid-up extension of the primary term of the lease. Some are named and categorized based on specific parameters and conditions. Below, we will outline a few of the possible variations: 1. Tennessee Amendment to Oil and Gas Lease with Paid-Up Extension Clause: This type of amendment typically clarifies and includes a clause that explicitly states the tenant's intention to extend the primary term of the lease by making a paid-up extension. It may outline important details such as the duration of the extension, the monetary amount required, and any additional provisions or agreements between the parties. 2. Tennessee Amendment to Oil and Gas Lease for Primary Term Extension Payment: This specific amendment focuses solely on the payment aspect of the extension. It outlines the agreed-upon payment required by the tenant to extend the primary term of the lease, often referring to a lump sum or fixed amount. Provisions may cover the timing, structure, and consequences for non-payment. 3. Tennessee Amendment to Oil and Gas Lease for Longer Primary Term: In some cases, the parties may opt for an amendment that seeks to extend the primary term beyond its original duration. This type of amendment typically involves negotiations between the tenant and the lessor for an extended period. It may also outline modifications to existing terms and conditions based on the longer term agreement. 4. Tennessee Amendment to Oil and Gas Lease for Expanded Acreage: When tenants want to expand their oil and gas operations by including additional acreage in the lease, they may use this particular amendment. It provides a detailed description of the new area of land to be included, along with any adjustments to payment terms, royalties, or other lease provisions. These types of amendments are legally binding documents aimed at amending and extending the primary term of an oil and gas lease in Tennessee. It is essential for all parties involved to have a clear understanding of the specific terms and conditions outlined within the chosen amendment before proceeding. Legal advice and professional assistance may be necessary to ensure compliance with state laws and proper execution of the amendment.
Tennessee Amendment to Oil and Gas Lease for Paid-Up Extension of Primary Term of Lease
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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.
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.
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.
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 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.
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.
Habendum Clause: Once the Primary Term expires, the habendum clause controls when the lease expires or how long it remains in effect (this lease term after the Primary Term is called the ?secondary term?).
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.
