Montana Property Law

Mark Mackin - Attorney at Law               Office Phone  406-227-5237
Mobile Phone 406-422-8652

Should You See a Lawyer before
Signing an Oil and Gas Lease?

Land and mineral owners are vulnerable to oil and gas exploration, production and leasing companies.  Take the time to fully understand any offer.  The terms of a lease can be years or even decades.  A lease can prove beneficial or a disaster.  Even reputable companies serve their own interests, not yours.

Consider the land owner who receives a generous lease agreement.  It's for more money than the family down the road got from a competing company.  But a careful reading of the lease shows that the landowner accepts sole liability for any water quality degradation caused by the road and holding pond.  Are the short-term monetary advantages worth the long-term liability.

If a company offers you a "standard agreement," ask yourself,  "Is my situation typical or average?  Or, does my land and family need special consideration?  Are the needs of the oil and gas company compatible with my operation?"  (Hint: There is no such thing in law as a "standard agreement.")  It may be labeled "final" as well, but everything is negotiable.

Oil and gas leases are offered to mineral owners or surface and mineral landowners. Their rights are different and their relationship to the lessee is different. Mineral owners are not usually concerned about the surface.  Their primary concern is the value of the lease and production.

A lease for the surface owner who also owns the minerals is a two-edged sword.  There is money to be made but there are also  trade offs and impacts to surface resources.  A leaseholder must understand how the lease will affect the land, surface operation and value.  Will the surface interest be fairly compensated for downtime during development or for any damages that may occur? And, who will deal with the environmental regulators when they arrive asking questions?  Air and water belong to the public.

Legal Note: Sand and gravel are not minerals under Montana law.  But federal law such as the Stock-raising Homestead Act may have reserved minerals to the federal government.  In this case under federal law, sand and gravel are minerals.

Land & Mineral Owner Services
Provided by Mark Mackin

  • Consultation to determine client's legal needs and goals
  • Evaluate clauses of the lease
  • Compare interests of landowner with the  interest of the company
  • Negotiate changes
  • Negotiate sale of an existing lease to
    a surface owner or operator

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