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The primary purpose of the oil and gas lease is to hold the oil and gas for development by the Lessee yet most oil and gas leases are silent as to the obligations of the Lessee with respect to the conduct of operations after oil and gas is discovered.
A memorandum of lease is a recordable instrument that is used to alert third partiessuch as lenders, other tenants of the property, and prospective buyersthat there is a leasehold interest encumbering a piece of real property.
Oil and gas exploration companies generally want to hold the leased mineral rights for a period of years until they actually begin drilling. This could be because the price for natural gas is down, or their rigs are operating elsewhere, or for any number of business reasons.
Memorandum of Lease. (Oil Gas) This form is a memorandum of lease that summarizes an oil and gas lease without disclosing confidential information contained in the lease itself. It is filed in the county in which the leased property is located to put third parties on notice that a lease exists.
The BLM issues both competitive and noncompetitive leases for a 10-year period. BLM State Offices conduct lease sales quarterly when parcels are available for lease.
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In May, the U.S. Department of the Interior announced that it would cancel the leases, citing a lack of industry interest in leasing in the area.
A mineral owner should carefully consider the following recommendations: Keep the primary term as short as possible as this encourages early exploration. Generally, do not sign a lease with a primary term exceeding three years. In actively developed areas, a one year primary term or even less is sufficient.
The BLM currently manages 37,496 Federal oil and gas leases covering 26.6 million acres with nearly 96,100 wells.
Recording the memorandum of agreement protects the parties against certain kinds of actions by people that did not sign the agreement but have some claim against the property or against one of the owners.
Generally, the typical private oil and gas lease provides for the lessee to obtain the rights incidental to exploration, drilling, developing, producing, and disposing of the oil, gas, and associated hydrocarbons underlying the leased premises.

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