The option holder, who has an active interest, is primarily interested in obtaining information about his existing and potential leases (whether or not the option holder chooses to use his option to accept the use of the farm); and whether its surface should be bound for a longer period than the option period in order to secure drilling on that surface or, at least, in its general environment. He is also interested in participating in other drilling opportunities that may be generated by geophysical information. For this reason, detailed provisions relating to the exchange of information; The type of raw data to collect Drilling obligations on the farm; the interests of work, the area of mutual interest and the confidentiality of information provisions; are of great importance in the option agreement with the option tenant. Since the Optionor lessor relies heavily on the best rental terms it obtains when the option switches to a leasing plan, a landowner`s Seismic option generally requires the option taker to a minimum selection — in other words, to accept a lease for at least part of the contract area at the option price indicated. While this increases the effective price of the seismic option is uns promising with regard to the entire wing of the country, it is in turn the price to pay is the day your company pays for the greater flexibility of a seismic option. The seismic option also offers benefits for the landowner. Its area is bound for a shorter period than if it had granted a lease for a “wild cat rank.” The terms of the lease on the surface that optionee-Lessee finally chose after its seismic assessment will often be much more attractive to the owner than if a lease had been made without provisional seismic use: in addition to a higher bonus per hectare on the selected area3, the lease may contain provisions such as back-ins. , higher royalties than normal royalties, drill-or-drop requirements, etc.4 In addition, with respect to the area not selected by your company, the owner can refer to the high bonus that was paid on the surface that was chosen as the basis for seeking a higher bonus by other companies that now wish to rent that remaining area.5 Two alternative approaches are available to you. which can be much more advantageous. One is to get seismic options from landowners and other work owners in the area, among which the area may be bound in advance by your agreement to pull some seismic interiors into the area. This does not require you to drill — or pay expensive bonuses for leases that may or may not be structurally necessary — until you gain the opportunity to evaluate the results of your geophysical exploration. The alternative is to enter into an exploration agreement with one or more other companies that will share the costs and risks of the first geophysical assessment, experimentation with promising surfaces and the development of productive prospects. For an oil company, options are a very cheap way to secure a potential interest in oil or gas rights.
For a free owner whose mining rights have not been leased for years or whose lease fees are bound indefinitely either by a suspended gas well or by a gas well producing minimum royalties, the $500 or $1,000 may appear as free money and the potential for a new lease with a greater bonus consideration may seem tempting.