Oil and Gas Lease
A contract where a mineral owner grants an operator the right to drill and produce, in exchange for a bonus, royalty, and other terms.
An oil and gas lease is the contract that lets an operator explore for and produce oil and gas on your minerals. In legal terms it conveys the mineral owner's working interest to the operator for the lease period, while the owner keeps a cost-free royalty on what is produced. It is recorded in the county clerk's deed records, so it shows up in any title search.
The core economic terms are the bonus paid up front, the royalty fraction, and the primary term. Beyond those, the clauses — Pugh, depth severance, pooling, shut-in — decide how much acreage and how many zones the operator can hold, and for how long.
Lease language varies widely by basin and operator. Before signing, have an oil and gas attorney review it. See our buyer's guide for how leases affect value.