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.
South Dakota Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor: In South Dakota, a Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor refers to a specific provision in an oil and gas lease agreement. This provision grants the lessor (the landowner) the right to purchase any production extracted from their property before the lessee (the oil and gas company) can sell it to a third party. This preferential right ensures that the lessor has the first opportunity to benefit from the extracted resources. Keywords: South Dakota, Reservation, Call on, Preferential Right, Purchase Production, Lessor, Oil and Gas Lease Agreement, Landowner, Lessee, Extracted Resources. There are two primary types of South Dakota Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor: 1. Reservation of A Call On Production: This type of reservation allows the lessor to officially call for the purchase of any oil and gas production from their property. When the lessee intends to sell the produced resources to a third party, the lessor can step in and exercise their right to acquire the production at an agreed-upon price. This provision secures the lessor's ability to participate in the profits generated from their land. 2. Preferential Right to Purchase Production: In this type of reservation, the lessor is given a preferential right but is not obligated to purchase the extracted resources. If the lessee receives an offer from a third party to buy the production, the lessor has the option to match that offer and acquire the production themselves. This provision empowers the lessor to potentially benefit from a higher offer or to decline the purchase if it doesn't align with their financial objectives. It is essential to carefully review the specific terms and conditions outlined in the South Dakota Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor, as they can vary from lease to lease. These reservations ensure that the landowners have a significant say in the utilization and monetization of the natural resources found on their property. Note: It is recommended to consult with legal professionals or experts in oil and gas leasing to fully understand the intricacies of the South Dakota Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor.
