ABANDONED WELL: A well not in use because it was a dry hole
originally, or because it has ceased to produce.
ABSTRACT OF TITLE: A chronological history of the ownership or
significant events affecting a particular piece of property. In formal
usage, a document prepared by an abstract or title company and
certified by the preparer to contain all pertinent information or
copies of all documents affecting title to a given piece of property.
The legal instrument whereby Oil and Gas Leases or Overriding
Royalty interests are assigned or conveyed.
ASSIGNEE: The individual to whom Oil and Gas Leases or Overriding Royalty are
ASSIGNOR: The individual conveying Oil and Gas Leases or Overriding Royalty in an
Cash consideration paid to a landowner or mineral owner on the
execution of an Oil, Gas and Mineral Lease.
Stub attached to a check disclosing well name, month of production,
price received and total volumes produced.
Yearly payments made during primary term to Lessor to delay
DEPOSITORY BANK: The bank to
which payment of delay rental or other sums may be paid to the
credit of lessor or his successors in interest.
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 lands, minerals, etc.
The person receiving the grant of lands, minerals, etc.
GROSS WORKING INTEREST: See
definition for Working Interest.
JOINT OPERATING AGREEMENT:
An agreement among working interest owners describing how a well is
to be operated.
LANDMAN: The individual who
negotiates oil and gas leases with mineral owners, cures title
defects and negotiates with other companies on agreements concerning
The person who generally owns all or part of the minerals under his
lands and is entitled to lease the same.
LEASE: See Oil, Gas and Mineral Lease.
LESSEE: The person who receives
the lease, sometimes called the tenant.
LESSOR: The person giving the
lease, sometimes called grantor or landlord.
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.
MINERALS (MINERAL INTEREST): See
definition for Participating Royalty.
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.
A working interest owner in a well, but is not Operator.
A royalty interest which "participates" in any oil or gas found but
does not "participate" in lease bonuses or rentals.
OIL, GAS & MINERAL LEASE:
The agreement outlining the basic terms of developing lands or
minerals such as royalty to be paid, length of time, description of
OIL & GAS LEASE: See
definition for Oil, Gas and Mineral Lease.
OPERATING AGREEMENT: See
definition for Joint Operating Agreement.
The costs of operating a well
A working interest owner who is also the well operator.
The party designated in the Operating Agreement to conduct the
operations of the well.
A royalty interest derived from the working interest, in excess of
the royalty provided in the Oil Lease. Usually added on during an
An Oil and Gas Lease where rental payments are paid along with
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.
The initial period in an Oil and Gas Lease to develop the property.
A clause added to an Oil Lease to limit holding non-producing lands
or depths beyond primary term of lease. Also called a Freestone
Funds received from the production of oil or gas, free of costs,
ROYALTY DEED: A
deed conveying a royalty interest.
ROYALTY ESTATE: Pertaining
to the royalty owners share.
SALT WATER DISPOSAL WELL:
A well into which oilfield salt water is disposed.
SEVERENCE TAX: A state or municipal tax
on oil and gas products levied at the wellhead for the removal of
the hydrocarbons. Also called Production Tax.
SEVERED MINERAL INTEREST: An interest in the minerals in,
on and under a given tract of land owned by a person other than the
SEVERED ROYALTY INTEREST: Nonexpense-bearing interest in
minerals produced and saved from a tract owned by someone other than
the surface owner. Owner of severed royalty interest gets a share of
production from wells, but does not have to share the costs of
production. The interest may be set up prior or subsequent to the
leasing of the land, granted or reserved for years, for life, in fee
simple defeasible or in perpetuity.
ROYALTY: Payment to royalty owners under the terms of a
mineral lease which allows the lessee to defer production from a
well capable of producing in paying quantities but shut-in for lack
of a market or marketing facilities.
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: The right
granted to the lessee of a property to explore for and to produce
and own oil, gas or other minerals. The working interest owners
bear the exploration, development, and operating costs on either a
cash, penalty or carried basis.