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Definitions
of Terms
ASSIGNMENT
The legal instrument whereby
oil, gas and mineral leases or overriding royalty interests are assigned/conveyed.
ASSIGNOR
The person conveying oil,
gas and mineral leases or an overriding royalty in an assignment.
ASSIGNEE
The people to whom oil,
gas and mineral leases or overriding royalties are assigned/conveyed.
BONUS
Cash consideration paid
to a landowner or mineral owner on the execution of an oil, gas or mineral
lease.
DELAY RENTAL
Yearly payments paid during
primary term to lessor to delay drilling.
DEPOSITORY BANK
A bank designated in an
oil, gas and mineral lease to receive and distribute delay rentals.
DIVISION ORDER
A schedule of owners and
their decimal share in revenues of the well, derived from the sale of oil
or gas.
GRANTOR
A person who grants or conveys
land, minerals, etc.
GRANTEE
The person receiving the
grant of land, minerals, etc.
GROSS WORKING INTEREST
See Working Interest.
JOINT OPERATING AGREEMENT
An agreement among owners
describing how a well is to be operated.
LANDOWNER
The person who generally
owns all or part of the minerals under his land and is entitled to lease
the same.
MINERALS
See Participating Royalty.
AKA Mineral Interest.
MINERAL OWNER
Generally one who owns only
minerals under a tract of land (but no surface) along with the right to
execute a lease on the same.
LEASE
Another name for an oil,
gas and mineral lease.
LESSOR
The party who grants an
oil, gas and mineral lease.
LESSEE
The purchaser of an oil,
gas and mineral lease.
NET REVENUE INTEREST
An owner's interest in the
revenues of a well.
NET WORKING INTEREST
Share in well proceeds attributable
to the working interest.
NON-OPERATING INTEREST
A working interest owner
in a well, but not the operator.
NON-PARTICIPATING ROYALTY
A royalty interest which
"participates" in any oil, gas or mineral found but does not "participate"
in lease bonuses or rentals.
NORM
Normal occurring radioactive
material. Can cause environmental concerns.
OIL, GAS & MINERAL LEASE
The agreement outlining
the basic terms of developing lands or minerals such as royalty to be paid,
length of time, and description of land.
OIL & GAS LEASE
Same as an oil, gas and
mineral lease.
OPERATING AGREEMENT
Same as joint operating
agreement.
OPERATING EXPENSES
The costs associated with
operating a well.
OPERATING INTEREST
A working interest owner
who is also the well operator.
OPERATOR
The party designated in
the operating agreement to conduct the operations of the well.
OVERRIDING LOYALTY
A royalty in excess of the
royalty provided in the oil lease usually added on during an intervening
assignment.
PAID-UP LEASE
An oil and gas lease where
rental payments are paid along with a bonus.
PARTICIPATING ROYALTY
A royalty interest giving
its owner the right to "participate" in bonuses received in leasing along
with the right to "participate" in any oil or gas found.
PRIMARY TERM
The initial period in an
oil and gas lease to develop the property.
PUGH CLAUSE
A clause added to an oil
lease to limit holding non-producing lands or depths beyond the primary
term of lease.
ROYALTY
Funds received from the
production of oil or gas, free of costs, except taxes.
RUN STUB
Stub attached to a check
disclosing month of production, gas or oil, price received, and total volumes
produced.
SALT WATER DISPOSAL WELL
A well into which oil field
salt water is disposed.
SEVERANCE TAX
A tax due the state on oil
or gas produced or "severed" from the earth.
SEVERED MINERALS
Minerals whose title has
been severed from the surface title.
SHUT-IN
An oil or gas well that
is inactive.
SURFACE OWNER
Usually a landowner who
owns no minerals under his land.
UNLEASED MINERAL INTEREST
A mineral interest not subject
to an oil lease.
WORKING INTEREST
Interest(s) in a well which
bears the drilling and operating expenses.
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Abbreviations
BOPM - Barrels of Oil Per
Month
DR - Delay Rental
DO - Division Order
GWI - Gross Working Interest
JOA - Joint Operating Agreement
MCFPD - Thousands of Cubic
Feet of Gas Per Day
MI - Mineral Interest
NRI - Net Revenue Interest
NWI - Net Working Interest
OGML - Oil, Gas and Mineral
Lease
OL - Oil Lease
ORRI - Overriding Royalty
Interest
RI - Royalty Interest
SI - Shut In
SWDW - Salt Water Disposal
Well
UMI - Unleased Mineral Interest
WI - Working Interest
*OilLeaseBuyers.com
specializes in evaluating, buying and selling oil rights and mineral interests
from private parties and trusts. If you wish to sell a mineral interest or oil
right (working interests, royalty interest and other types) please call us at
714-338-6129 x1 or fill out our info form and email it to us. We will
contact you with an offer shortly. |