Monolith
17Dec/20Off

Seismic Option Agreement

-- content of the option agreement. While there will be obvious similarities between the content of a tenant`s seismic option, as discussed below, and a seismic option from a lessor, the differences between the options and objectives and the nature of the options will also result in significant differences between the agreements. The seismic option also offers benefits for the landowner. Its area is bound for a shorter period than if it had granted a lease for a "wild cat rank." The terms of the lease on the surface that Optionee-Lessee finally chose after its seismic assessment will often be much more attractive to the lessor than if a lease had been taken without provisional seismic conditions: in addition to a higher bonus per hectare on the selected area3, the lease may contain provisions such as back-ins, higher than normal royalties. Drilling or drop requirements etc.4 In addition, with respect to the area not selected by your company, the owner may refer to the high bonus paid on the surface that was paid according to the option of seeking a higher bonus by other companies that now wish to rent that remaining area.5 The option renter may be interested in the amount of the bonus to be paid for the selected area. , and pay the royalty in case of production. He does not expect to participate in other drilling opportunities in the region;6 and the provisions relating to the exact nature of the seismicity to be shot and the information to be provided to the optioner may be much less extensive than in the case of a seismic option of a tenant. Unlike optionor-Lessee, the optional landlord may insist that the optionor give interpretations of seismic fire and not just raw data.7 Conversely, Optionee still wants provisions on "confidentiality of information"8 - especially if it is its interpretations of seismic that have been made available to the optionor. Of course, your company could also obtain a Seismic license from the landowner and/or taker 1 without agreeing to disclose the information; and could then try to negotiate its leases, farms and drilling options.

By then, however, he will have flipped his hand and others will realize that your company now has information about the basement and that the surface it is trying to acquire should be considered valuable on the basis of this information. In most cases, the end result will be that the surface cannot be purchased at that time - at least on terms acceptable to your business or that must be purchased on a cost-fair basis. Often, the area will have already been recovered by others, either on the basis of purely speculative acquisitions (often if the surface could still be purchased for a song) or because your information has been mysteriously "felt" by your competitors. You can give up your rental option during these 18 months with never more than postage and pocket change of your own money in the deal or in danger to another person with profit. Many in oil and gas make money from other peoples` assets, it is quite legal, but what do you think 19 months now, if you have not received anything? These farm-out agreements are usually concluded in an undetectable form of matching arrangement, which usually contains provisions on the head and up, offering just a bad option deal and offering you a check for seismic damage in advance, but if they refuse to pay for seismic damage at the time of the deal exchange, I would tell them to take a hike.

Filed under: Uncategorized Comments Off
Comments (0) Trackbacks (0)

Sorry, the comment form is closed at this time.

No trackbacks yet.