Expert: Alan H. Coogan Date: 7/16/2008 Subject: oil & gas lease in KY
Question My grandparents have been approached by Hayden R. Blackwell in Adair Co. Kentucky about an oil & gas lease. They asked me to look at the terms of the lease but, I do not know what I am looking for. It is 106 acres. They are using "Kentucky 88-Gas Provision" paperwork.
I do not see a termination clause (lessee X'ed out the termination paragraph) or an indemnification clause.
The paperwork says the lease is for 1 yr "and as long thereafter as oil or gas" are produced.
I do not see any indemnification for my grandparents. What if these people go out of business--we will have to clean up and cap the well??
Have you ever heard of Hayden R. Blackwell and is there a specific form I could use instead of one?
thank you so much for your thoughts
Doug
Answer Dear Doug: All experts says the question was not answered!--
1.No., I do not know this company--try the Ky oil and gas regulators.
2. Kty 88 etc--just a form name.
3. The lease should have a primary term, FOR EXAMPLE ONE YEAR.
and a secondary term--so long as oil is produced in paying quantities etc.
4. Most leases terminate at the end of the secondary term. You can write any length you want.
5.If the people go out of business--you are stuck, kind of.
6. The lessors (grandparents) get the money from royalty payments if the own the land top to bottom.
It should say the percentage e.g.1/8th or 12.5%.
7.If all else fails--see a local lawyer.
8. Remember--it is an agreement--make sure you agree.
9. If you need professional help,get it.
