What are the terms of a typical lease agreement?
The basic lease agreement provides for an initial bonus payment upon signing a lease, royalty percentage payments paid if oil or natural gas is found and produced from the property, and a time-frame within which Highland Rim Energy has to begin production operations. If natural gas production does occur, the lease is in effect for the life of the well which could be 20-years or more. What is a Bonus Payment? The term bonus refers to any up-front money paid to the owner of mineral rights in consideration for signing an oil and natural gas lease. A lease bonus is not considered a royalty because the payment is made before natural gas production commences and is determined without regard to any possible production. This payment is calculated on a per-acre basis. What is a Royalty Payment? The term royalty refers to a percentage of production paid to the owner of the mineral rights, based on the amount that Highland Rim Energy is paid for delivering natural gas to market. Royalty payments
The basic lease agreement provides for an initial bonus payment upon signing a lease, royalty percentage payments paid if oil or natural gas is found and produced from the property, and a time-frame within which Highland Rim Energy has to begin production operations. If natural gas production does occur, the lease is in effect for the life of the well which could be 20-years or more. What is a Bonus Payment? The term bonus refers to any up-front money paid to the owner of mineral rights in consideration for signing an oil and natural gas lease. A lease bonus is not considered a royalty because the payment is made before natural gas production commences and is determined without regard to any possible production. This payment is calculated on a per-acre basis. What is a Royalty Payment? The term royalty refers to a percentage of production paid to the owner of the mineral rights, based on the amount that Highland Rim Energy is paid for delivering natural gas to market. Royalty payments
