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.
Texas Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor is a significant legal concept in the oil and gas industry. This reservation allows the lessor to retain the right to purchase a portion or all of the hydrocarbons produced from the leased property before they are sold to third parties. By exercising this right, the lessor can benefit from the potential profits derived from the production. There are several types of Texas Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor, each with its specific characteristics: 1. Right of First Refusal: This type of reservation gives the lessor the option to purchase any production from the leased property before it is offered to others. If a lessee receives an offer from a third party to purchase the production, the lessor must be given the opportunity to match the price and terms of the offer before the lessee can proceed with the sale. 2. Right of First Offer: With this type of reservation, the lessor has the right to be the first one approached by the lessee when production is available for sale. The lessee must provide the lessor with a complete and detailed offer, and the lessor then has the choice to accept or decline it. If the lessor declines, the lessee is free to offer the production to third parties. 3. Right of Participation: Under this reservation, the lessor is entitled to participate in the proration unit or production unit when the lessee decides to explore additional acreage within the lease. The lessor can purchase an interest in the newly drilled well or any other production associated with the expanded unit. These reservations serve to protect the lessor's interest in the production potential of the leased property. By preserving the right to purchase or participate in the production, the lessor ensures a share in the future revenue generated from the oil and gas reserves. In conclusion, the Texas Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor encompasses various types such as Right of First Refusal, Right of First Offer, and Right of Participation. These reservations aim to protect the lessor's financial interests and allow them to benefit from the profits derived from the hydrocarbon production on their property.
