South Dakota Surface Tenant's Subordination to an Oil and Gas Lease: A Detailed Description In South Dakota, the subordination of a surface tenant's rights to an oil and gas lease is a legal arrangement aimed at fostering efficient exploration and extraction of mineral resources. When a landowner grants an oil and gas lease, the surface tenant's rights become subordinate to the rights of the lessee. This means that the lessee (the party holding the oil and gas lease) has the authority to utilize the surface of the land for the purposes of drilling, exploration, and production. Keywords: South Dakota, surface tenant, subordination, oil and gas lease, rights, landowner, lessee, authority, drilling, exploration, production. Types of South Dakota Surface Tenant's Subordination to an Oil and Gas Lease: 1. Voluntary Subordination: This is a situation where the surface tenant voluntarily agrees to subordinate their rights to the lessee's rights. This type of subordination is typically agreed upon during lease negotiations, and the surface tenant may be compensated for providing access to the land. 2. Statutory Subordination: In some cases, South Dakota laws may require surface tenants to automatically subordinate their rights to an oil and gas lease. These statutory provisions are designed to streamline the process of mineral rights exploration and production. Surface tenants need to be aware of these laws and their implications when entering into lease agreements. 3. Express Subordination: This refers to a situation where an explicit subordination clause is included within the lease contract itself. The clause will outline the specific conditions and terms of the subordination, ensuring clarity and legal protection for both the surface tenant and the lessee. 4. Implied Subordination: In certain situations, subordination may be implied even if it is not explicitly stated in the lease agreement. Implied subordination generally occurs when the lease contract inherently grants the lessee the authority to access and utilize the surface for oil and gas operations. It is important for surface tenants to thoroughly understand the terms and implications of subordination before entering into an oil and gas lease agreement in South Dakota. They should carefully review the lease document and seek legal advice if necessary to ensure their rights and interests are adequately protected. In conclusion, the subordination of a South Dakota surface tenant's rights to an oil and gas lease is a crucial aspect of mineral rights exploration and extraction. By subordinating their rights, surface tenants enable lessees to access and utilize the land for oil and gas operations. Understanding the different types of subordination can help surface tenants navigate lease agreements and protect their rights within the legal framework of South Dakota. Keywords: South Dakota, surface tenant, subordination, oil and gas lease, rights, landowner, lessee, drilling, exploration, production, voluntary subordination, statutory subordination, express subordination, implied subordination, lease agreement.
South Dakota Surface Tenant's Subordination to An Oil and Gas Lease
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Granting Clause: The clause in the deed that lists the grantor and the grantee and states that the property is being transferred between the parties.
Granting Clause: This clause specifies: (a) the land that is being leased; (b) which minerals are being leased (oil, gas, uranium, etc.); and (c) and what rights the production company has to use the surface land in an effort to produce the leased minerals.
What is the granting clause? The granting clause is the clause under which the owner of the oil and gas rights leases the oil and gas rights to the oil and gas company along with the right to develop the oil and gas on a specifically described piece of real estate.
in clause (or shutin royalty clause) traditionally allows the lessee to maintain the lease by making shutin payments on a well capable of producing oil or gas in paying quantities where the oil or gas cannot be marketed, whether due to a lack of pipeline connection or otherwise.
A ?special warranty? is a covenant made by the lessor to defend the lessee against encumbrances or clouds on the oil and gas title created by the lessor during his ownership of the estate. The protection offered by this warranty is therefore limited to those title defects caused or created by the lessor himself.
