Monday, June 30, 2008

Facts About Non-Producing Leases

According to the American Petroleum Industry:

When oil and natural gas companies purchase a lease, it is because of the possibility the lease may yield enough oil or natural gas to benefit consumers and become economically viable. A lease is simply a block on a map and until a company actually completes the exploration process, there is no guarantee that it contains any resources.

The process takes considerable time. It involves geological exploration, data analysis and a series of government permitting steps, and that's before the industry even finds anything viable. If we do, more time-consuming steps follow before the first production of either oil or natural gas.

If a lease doesn’t produce energy, a company starts the process over again with a new lease – yet continues to pay rent on the original, non-producing plot of land. And if this land fails to develop natural resources within a certain time frame, it is returned to the federal government, forfeiting industry costs and investments.

Find out more here.


At 6/30/2008 2:10 PM, Blogger juandos said...

What's the deal here?

Are the folks at API trying to confuse a certain segment of politicos and their supporters with the facts?

At 6/30/2008 7:23 PM, Blogger K T Cat said...

Sounds like you're in league with the speculators! I say we should throw you into a pond. If you float, you're a speculator. If you sink and drown, you were not.

At 7/01/2008 1:39 AM, Blogger OBloodyHell said...

> If you sink and drown, you were not.

No, that's the test to see if he's made of wood.

To test if he's a speculator, we fill his pockets with his own money, then throw him in a pit with ravenous politicians. If he makes it out alive with any money, he's a speculator.

If he doesn't survive, or if he's completely broke, then he's not.


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