This lease rider form may be used when you are involved in a lease transaction, and have made the decision to utilize the form of Oil and Gas Lease presented to you by the Lessee, and you want to include additional provisions to that Lease form to address specific concerns you may have, or place limitations on the rights granted the Lessee in the “standard” lease form.
The Illinois Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor is a legal provision that exists in certain lease agreements pertaining to oil, gas, and mineral rights. This clause offers the lessor (landowner) the option to reserve the right to purchase any production yielded from the leased property before the lessee (oil or gas company) can sell it to third parties. By incorporating the Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor clause, lessors can safeguard their interests and exercise control over the sale and distribution of the resources extracted from their property. This provision ensures that lessors have priority and the opportunity to profit directly from the production rather than solely relying on royalty payments. Different types of the Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor provisions in Illinois may include: 1. Full Reservation: With this type, the lessor reserves the right to purchase the entire quantity of production, leaving no room for the lessee to sell it to third parties. This grants the lessor complete dominance over the sale and distribution of the resources. 2. Partial Reservation: In this scenario, the lessor reserves the right to purchase a portion or percentage of the production. This allows for both the lessor and lessee to sell the remaining production to other interested parties. 3. Preferential Right: Alternatively, the lessor may exercise a preferential right to purchase the production. This means that if the lessee receives an offer from a third party to purchase the production, they must first offer the lessor an opportunity to match or exceed the proposed terms before proceeding with the sale to the third party. The Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor clause can be a valuable tool for lessors in Illinois, as it enables them to actively participate in the commercialization of the resources on their land. By reserving this right, lessors can potentially negotiate more lucrative deals and ensure they share in the financial success resulting from the extraction and sale of natural resources.
