History of Oil

         Crude Oil: Key Historical Events

          Fundamentals of Oil
               Finding Oil & Gas
               Securing Leases
               Drilling For Oil & Gas
               Evaluating/Well Logging/Coring
               Completing the Well
               Cementing/Perforating
               Acidizing/Fracturing
               Artificial Lifts/Injection Wells
               Oil Production/Secondary Recovery
               Waterflooding in the Illinois Basin
               Operation/Sale of Oil

          Why Participate in Oil

          Choose Your Participation Level

          Tax Advantages

          Risks

Securing Leases Title

Oil RigOnce a likely area has been selected, the right to drill must be secured before drilling can begin. Securing the right to drill usually involves leasing the mineral rights of the desired property from the owner. The owner may be the owner of all interest in the land, or just the mineral rights. As payment for the right to drill for and extract the oil and gas, the owner will usually be paid a sum call a "lease bonus" or a "hole bonus" for every well drilled on the leased land. He will also retain a royalty on the production, if any, of the leased property. The royalty is the right to receive a certain portion of the production of property, without sharing in the costs incurred in producing the oil, such as drilling, completion, equipping and operating or production costs. The costs are borne by the holder of the right to drill and extract the mineral, which right is usually referred to as the working interest.

In many cases the procurement of the lease from the land owner is accomplished by a lease broker who will, in turn, offer and then assign the lease to an operator such as Maverick Energy, Inc. Maverick Energy is very selective in choosing leases for drilling. The lease broker usually retains an overriding royalty on the working interest as compensation for his services. In the case of Maverick’s leases, there generally is a retained land owner’s royalty of 1/8 of all production and a 1/16 overriding royalty on the working interest, retained or granted to one or more persons who may have acted as lease brokers.


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