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.
Virginia Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor is a legal term that refers to a specific right granted to a lessor in a lease agreement. This right allows the lessor to purchase any production from the leased property before it is sold to a third party. This detailed description will provide an understanding of this concept, its purpose, and the different types of reservations involved. In lease agreements, the lessor (landowner) may want to retain the option to purchase the production from the property in order to benefit from potential profits. This reservation ensures that if the lessee (tenant) intends to sell the production, they must first offer it to the lessor before offering it to anyone else. By reserving a call on or preferential right to purchase production, the lessor can have some control over the sale and distribution of resources extracted from the leased property. There are different types of Virginia Reservations of A Call on, Or Preferential Right to Purchase Production by Lessor, namely: 1. Full Reservation: In this type, the lessor retains the exclusive right to purchase the entire production from the property. This means that if the lessee plans to sell any production, they must first offer it to the lessor, who can decide whether to accept the offer. If the lessor accepts, they would purchase the entire production and directly benefit from its sale. 2. Partial Reservation: This type grants the lessor the right to purchase a certain percentage or portion of the production. For example, the lessor may reserve a call on 50% of the total production. In this case, the lessee would need to offer the reserved portion to the lessor before selling it to others, while retaining the remaining portion for their own sale. 3. First Refusal Right: This variation allows the lessor to have the first opportunity to purchase any production from the leased property. However, unlike full or partial reservations, the lessor is not obligated to purchase the production but has the option to do so before the lessee can sell it to third parties at a specified price or terms. If the lessor decides not to exercise their right, the lessee can then proceed with selling to others. The purpose of these reservations is to protect the lessor's interests by ensuring they have the opportunity to benefit from the production on their land or property. It provides the lessor with a certain level of control and the possibility of reaping potential financial rewards. In conclusion, Virginia Reservation of A Call on, Or Preferential Right to Purchase Production by Lessor is a legal provision that grants the lessor the right to purchase the production from a property before it is offered to third parties. This can be in the form of a full reservation, partial reservation, or first refusal right. These reservations aim to safeguard the lessor's interests and provide them with the opportunity to benefit from the production on their property.
