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David vs. Goliath: Negotiating the “Lessor's 88” and Representing Lessors and Surface Owners in Oil and Gas Lease Plays

Owen L. Anderson, Proceedings of 27th Annual Rocky Mountain Mineral Law Institute (1981)

With the rapid expansion of oil and gas exploration and development in the Rockies and Great Plains, many fee mineral owners are faced with two very important decisions: whether to lease, and under what terms and conditions. It is imperative that the country lawyer be prepared to negotiate a lease that will best serve the needs of the lessor. Contrary to the old clich, what is good for the oil and gas lessee is not necessarily good for the oil and gas lessor. A major objective of Part II of this paper is to assist counsel for a potential lessor in analyzing the company lease form and improving upon it.

Surface owners who are confronted with oil and gas exploration and development (whether or not they own [1030] mineral interests) are demanding more of a say in where, how, and when exploration and development will occur and what price the mineral lessee must pay to exercise lease rights. Part III discusses the legal relationship between the mineral and surface estates, analyzes common surface damage agreements, and refers to recent legislation concerning relations between the surface owner and the oil and gas lessee.

It is often necessary for the lessor to represent his own best interests at oil and gas conservation hearings. Part IV of this paper suggests how to prepare for and present the lessor's case before an oil and gas commission and discusses some corr