What are the duties of an operator under an oil and gas lease?

In addition to specific obligations that are spelled out in an oil and gas lease, oil and gas companies have certain express and implied duties under Texas law. Among them are:

Duty to Develop - An oil and gas company may have an implied duty to develop they lease to the extent that a reasonable and prudent operator would have.

Duty to Protect Against Drainage - An oil and gas company may have an implied obligation to drill an offset well to protect a common reservoir from drainage if a well is drilled to extract its resources from an adjacent tract of land.

Duty to Market - Courts impose upon a lessee the duty to market hydrocarbons produced from a well and to obtain the best price and terms possible for the sale of production

Read more about oil and gas leases.

Can I break an existing oil and gas lease?

In some cases, circumstances may allow a landowner to break an existing lease. Oil and gas lease agreements are complex and nuanced contracts whose language may afford a reasonable exist from an existing lease. An experienced oil and gas attorney can review your lease and advise you of your options. Read more about breaking an oil and gas lease.

What is the Barnett Shale?

The Barnett Shale is a natural gas rich geological formation in Texas that is estimated to stretch from the city of Dallas to west of the city of Fort Worth and south, covering 5,000 square miles and at least 17 counties. Read more about the Barnett Shale.

What is the Haynesville Shale?

The Haynesville Shale is a natural gas rich geological formation in northwestern Louisiana, southwestern Arkansas and eastern Texas. The most productive regions include Caddo, Bienville, Bossier, DeSoto, Red River, and Webster parishes in Louisiana and adjacent regions in southwest Arkansas and east Texas. Read more about the Haynesville Shale.

What is the standard oil and gas royalty paid to landowners?

There is no standard oil and gas royalty. Oil and gas royalty rates are driven by a number of market forces and vary over time. Royalty rates as high as 28% have been offered in high demand areas like the Barnett Shale and Haynesville Shale, but these are not necessarily the norm. If you are negotiating an oil and gas lease, an experienced oil and gas attorney may be able to help you maximize oil and gas royalty rates.