There are many mineral owners, who due to the lack of complete understanding of the leasing laws while entering into the contract are not able to yield maximum benefits of mineral interests. Mineral owners must not be lured in by only the attractiveness of the contract and must be fully aware of the Lease proposals. A better understanding of the proposals will not only guard them against any type of wrong doings but also would ensure that they can maximize the impact of the deal they are getting into.
The most common and most misunderstood clause when it comes to the Lease proposals is the Pugh Clause. The common mistake many owners commit is to feel secured due to the presence of Pugh Clause. But the fact is the Pugh clause may or may not be able to provide the protection to the owners, as there is no specific definition of this clause. It can be used in alternate ways; therefore it is good to have this clause with you but to depend upon it entirely would not be a good idea. The most important thing that must always be kept in mind while making Lease Proposals is to ensure that the proper identity of the person who is in contact and who has been contacted is fairly and properly established. There should only be one person from the family who should interact with the oil company, and there must not be any discrepancy in the statement. There should be clarity in the deal, and at times the owners are contacted by middlemen, agents, supervisors or may be directly by the entrepreneurs, since proper understanding of who is saying, what they are saying, must always be very clear to avoid any later conflicts of communication.
Proper investigation about the company or the owners that have contacted must be done before signing the Lease Proposals. Appropriate fine framed, legal paper work must be prepared, properly read and must be signed by both the parties to enter the deal. At times neglect in small basic things like paper work, or proper inquiry can have major implications and can even result in heavy losses; therefore it is important to be careful at the start to reap the benefits later.
At times people just tend to go with the price, their prime focus is entirely based on the mathematical calculations of what they will be receiving, and this can many times lead to unsatisfied transactions. Therefore, all the documents must be carefully studied, all the points involved must be fully understood, and if necessary an expert or an experienced person can be contacted. Remember your satisfaction before signing Lease Proposals is the key, since if you are not interested, you must not force yourself for any kind of agreement under any circumstances. Make sure that you do not warrant your mineral titles, you have full right not to sign them and also discard them completely if you are not interested. Lease Proposals if carefully processed can yield great benefits, therefore always ensure that you do not hurry with signing the deal.