The push and pull between mineral rights owners and production companies in the oil patch has only increased with the unprecedented production volume coming out of the Permian Basin. Indeed, in the Permian Basin last year, billions in transactions took place transferring mineral leasehold interests. With so much potential revenue on the line and generations of knowledge regarding lease contract negotiations, mineral owners are becoming increasingly sophisticated about the lease negotiation process.
Whether it’s a Producers 88 with a raft of addenda or a custom lease, lease negotiations are getting more and more complex. Gone are the days when production companies might reasonably expect that lease negotiations would be completed with a standard Producers 88 form with few, if any, addenda. Complicated lease agreements raise the likelihood of litigation, particularly when contracts are executed without careful consideration to the potential for litigation years later. The landscape has created a situation in which Texas jurisprudence has struggled to keep up.
R. Reese & Associates founder Rachel Reese notes that a well-drafted and reviewed lease can directly impact asset valuations and pay dividends in proactively reducing the likelihood of conflict and litigation later. Ms. Reese has been sharing her knowledge about best practices when negotiating custom leases at well-attended events, most recently when presenting to the Houston Chapter of the Society of Petroleum Engineers and the Houston Bar Association’s Continuing Legal Education.
To receive a copy of the presentations or for more information, please contact email@example.com.
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