Oil and gas leases are relatively common in Oklahoma. Energy extraction and production rank among the most common and profitable industries in the state. Property owners can make money from their mineral rights by signing leases with oil and gas companies. The terms of the leases that they sign can have a lasting impact on their use of the property.
State regulations generally impose a few important restrictions on energy leases and also easements that property owners need to understand.
Regular renewals are likely necessary
State laws limit the duration of both leases and easements related to mineral rights. Doing so helps protect everyone involved by avoiding unfairly long terms that may lead to grossly outdated arrangements that are unfavorable for one party or the other.
Under current Oklahoma state statutes, oil and gas leases for mineral rights usually should not last any longer than five years. Easements ensuring access to locations for mineral extraction can last longer. Oklahoma law allows an easement related to mineral rights to last for up to 20 years.
Property owners may need to prepare for negotiations when an easement or lease is about to expire. They may also need help ensuring that the terms that they agree to are mutually beneficial, as changes in the market can influence what is reasonable.
Working with an attorney when reviewing oil and gas lease terms or proposed easement extensions can be beneficial for property owners who retain mineral rights. Renewals can be as important as initial leases, and a thorough review of terms is important before signing to extend a lease or easement.