Before anyone can drill on your property, you must grant an oil and gas mineral rights lease to a qualified Oil & Gas Operator. This lease is a legal contract between you and the Operator. It should contain your name, the Operator’s name, a description of your property, term of the lease, any compensation for granting the lease, specifics about the landowner royalties you will receive and how they are paid, potential size of the drilling unit(s) and any special terms that are negotiated, along with all the usual legal language normally contained in contracts, such as insurance, assignability, etc.
In exchange for granting the oil and gas lease, the landower receives some percentage of gross oil and gas production proceeds, which normally is one eighth (1/8th) or, 12.5%. This is paid as the income from production is received by the Operator you can work with. Remember, this is a long term relationship and you want to be able to communicate with the Operator and work together to develop your property in a manner that is mutally beneficial.
See also Landowner Guides at the links on the left-hand side of this page.