Oil, Gas, and Mineral Lease Addendum for Lessor Protections

Summary

This template is an addendum that provides lessor protections, and is intended to be attached to an oil, gas, and mineral lease and contains terms and conditions that provide additional protection for the lessor. This template includes practical guidance, drafting notes, and optional clauses. An oil and gas lease is used to convey the right to develop mineral interests to a party (the lessee) for a period of time. Oil and gas leases are often standardized and do not contain specific provisions that provide protection to one or both parties. Therefore, parties often draft addenda to standard oil and gas leases, which provide specifics surrounding the parties to the lease transaction and the circumstances surrounding the lease. This addendum has been drafted on the presumption that the lessor is the owner of the surface estate of the leased property. However, if the lessor is the owner of the mineral interests being leased, but not the owner of the surface of the leased premises, all the provisions dealing with protecting the surface can be deleted from the addendum. In such a case only the following paragraphs in the addendum would still be relevant: • 1. Addendum Provisions Govern • 2. Royalties • 3. Limited to Hydrocarbons • 11. Expiration as to Lower Depths • 12. Shut-In Limitation • 13. Computation of Royalty • 14. Payment of Royalties and Division Orders • 15. Pugh Clause • 16. Limitation on Acreage for Gas Unit • 17. Effectiveness of Pooling • 18. Developed Acreage • 21. Salt Water Disposal and Construction of Other Improvements • 22. Indemnity and Hold Harmless • 23. Damages and Insurance • 24. No Warranties • 26. Compliance with Rules and Regulations • 27. Compliance with Environmental Laws and Regulations • 28. Release of Lease • 29. Plugging of Wells • 30. Assignment • 32. Inurement • 34. Lessor Free from Charges For more information on oil and gas leasing, see Oil & Gas Lease Agreement Drafting and Negotiation for the Landowner, Due Diligence in Upstream Oil and Gas Lease Transactions, Lease Agreement Drafting and Negotiation (Oil & Gas Company), Commercial Leasing (TX), and Oil and Gas Conservation and Leasing State Law Survey.