I had the smartest attorney in America in my office recently. He said when he graduated from law school he realized he wasn't the brightest bulb in the bunch when it came to all things related to the law, but he was real good at estate planning and money planning so he has excelled in that field. That practice has blossomed now that the oil and gas boom has made some Jed Clampetts out there they have begun the wise trip to town to discuss what they should do with all this new found wealth before they fritter it all away.
This led attorney 3 (as I will call him to keep a flood of people rushing to his office) into discussing with other clients the leasing prospects and resulting money there from, landowner groups, representation and ultimately getting the right lease negotiated. (Now here comes why I respect this man and think a lot of him).
He said he was astonished at the leases being offered. Who could possibly understand all the verbiage on 18 to 22 pages? Anyone who claimed to know it all couldn't possibly. The best someone could do for you is try to get a handle on it the best they could, negotiate with some integrity and hope the people you are dealing with live up to their part of the deal. No one has become an expert on this in the last five years or so since these leases started appeared in the eastern part of the U.S.
An honest man, and an attorney to boot. Not that I am putting attorneys down, as one of my closest friend is an attorney and he has kept me out of dutch several times during my governmental career. But, this guy has hit a home run with his take on what is happening and his struggle to comprehend the legal contract being used to bind everything together.
And make no mistake; the lease is simply that, a legal contract. It is bound and governed by the laws we have established to govern dealings in between people, corporations and even governments. It has no magical ph and should not be treated any different than any other agreement. It has articles and clauses common to this industry like other industries would have.
The idea and practice of "what a prudent operator would do" has been held in many courts. So, reading your "contract" and seeing an smart guy to invest your future earnings like the attorney in my office will go a long way in determining your happiness with the contract you are about to sign. I am nearing my 40th year in this business and the first thing I say to a prospective lessor is to take it to your attorney, I will be glad to meet with him or her. But, don't think that everything you want will be in the agreement. Negotiations are to conclude with a "contract" good for both parties.
Over the years, I have saved different leases and clauses I have run into that either enlightened me or amused me like the one where guy wanted lowered down in the well on a wire line to personally inspect the formation (True). Some of the current lease contracts that are thick as Bibles are going to make that library along with some of the scrupulous comments made at meetings by those practicing that are not as smart or perhaps as honest as this guy. What it is, is what it is, and it's only as good as the person on either end of the contract.