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.
Rhode Island Reservation of a Call on, or Preferential Right to Purchase Production by Lessor is a legal provision that grants a lessor (landowner) in Rhode Island the right to reserve the first option to purchase any production or mineral resources extracted from their property. This means that if any production occurs on the leased property, the lessor has the right to either "call" (demand) a purchase of the production or exercise their preferential right to buy it. This unique reservation is typically included in lease agreements between the lessor and lessee (tenant) when the leased property is known to have potential production capabilities, such as oil, gas, minerals, or other valuable resources. By including this provision, the lessor ensures they have some control over the extraction and sale of resources from their property. The Rhode Island Reservation of a Call on, or Preferential Right to Purchase Production by Lessor can be further categorized into two types: 1. Reservation of a Call: In this scenario, the lessor has the right to demand the lessee to sell them the production at an agreed-upon price. The lessor exercises this right by sending a formal notice, or "calling" for the purchase of the production. The lessee then has a specified period of time to either accept the offer and sell the production to the lessor or decline the offer. 2. Preferential Right to Purchase: This type grants the lessor a priority to purchase the production over any other potential buyers. If the lessee receives an offer from a third party to purchase the production, they must first obtain an offer from the lessor on the same terms and conditions. If the lessor decides to purchase the production, they can exercise their preferential right and acquire it before the lessee can sell to any other party. The inclusion of the Rhode Island Reservation of a Call on, or Preferential Right to Purchase Production by Lessor provides the lessor with a means to either directly profit from the production of their property or control the sale of resources to ensure they receive fair compensation. Keywords: Rhode Island, reservation, call on, preferential right, purchase production, lessor, lessee, lease agreement, extraction, resources, oil, gas, minerals, property, demand, notice, offer, third party, sale, compensation.
