Skip to main content

View more from News & Articles or Primerus Weekly

By Paul R. Yagelski, Esq.

Rothman Gordon

Pittsburgh, Pennsylvania

The oil and gas company through its landman has offered you an oil and gas lease. The landman tells you that the lease is a gross lease, meaning that your royalty would be based on the proceeds received from the sale of your gas without any post-production cost deductions. To support his statement, the landman points to an addendum to the lease you are offered and a clause therein, entitled, "Market Enhancement Clause." The landman indicates that this clause prevents any deductions and makes the lease a gross lease. If this is the representation that is made to you, this is false! A market enhancement clause does allow for deductions.

Read More