How To Make Money With Oil And Gas Leasing.

When it comes to making money with oil and gas leasing, you need to understand a few basic things. First, you need to understand the basic concept of leasing.
Basic concept of oil and gas leasing.

There would be two parties involve; lessor or the landowners and lessee or the one working the land. Lessors makes money by lease payment received and royalties. Lessee makes money by what they can extract from the land. Lessor can either keep or surrendered surface rights. Surface rights means that the lessee can extract the mineral from that piece of land but the lessor has the rights on whatever development above ground. In this case, lessee will hold mineral rights. There are times when lessee obtain surface rights too but usually when they see potential in developing the surrounding area.

The law that governs oil and gas leasing differs from regions, country and even states. Those who intend to be either lessor or lessee must be well versed in this matter. Most of the time, they employ experienced attorney to review and draw up contracts to avoid future disputes.

So how to make money with oil and gas leasing.

1.Oil and Gas Lease Payments

This applies when you are the landowner or lessor. If you have a piece of land, you might want to get some advice on the lands geology. If it has sufficient potential for good oil and gas exploration, you could make it well known in many ways and attract the interest of potential lessee. If you have a few lessee interested in your land, choose a oil and gas exploration company that have good track record. This is essential in getting more income out of your land.

2.Oil and gas royalties.

Not only, as lessor, you will get lease payment, you could also gets oil and gas royalties. The royalties depends on the agreed percentage should there be any oil and gas found on your piece of land. That is one of the main reasons why you should choose a reputable oil and gas exploration companies. Oil and gas leasing can give you stable and substantial returns if everything works out. However, if you do not own that piece of land there are still other ways to earn oil and gas royalties. Ask advice from oil and gas investment companies or experienced advisers on this.

3.Buying land with oil and gas exploration potential

Those who have the means will buy the piece of land that showed good potential for oil and gas exploration. Then they become lessor and enjoy lease payments and royalties. There are cases whereby the oil and gas exploration buy those lands to be explored and sell it back once extraction are done.

4.Invest in oil and gas leasing

In oil and gas leasing, the investors usually invest on the lessee. If it involves oil and gas exploration then the investment would be highly risky. However, if the lessee is already operating or extracting on a current producing oil wells, the risk is lower. Naturally, the first option could give a much higher returns but it preferable if you are in the position to take up high risk oil and gas investment.

Oil and gas leasing can provide you with substantial long term income. Moreover, you can participate in many forms. The common one is as an oil and gas investors. Though, nowadays, due to many government supports the oil and gas investments expands rapidly. You might discover that there are more investing options that you could look into. Get better advice from a reputable oil and gas investment companies.