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Understanding Oil, Gas, and Mineral Leasing Rights

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Sentry Energy Production
Sentry Energy Production

Sentry Energy Production, LLC is a private Texas oil and gas company pursuing development and exploration in Kansas. Leasing oil, gas, and mineral rights from landowners is important to their activities. Traditionally in the US, those who owned surface land also owned mineral rights, but now owners can retain surface rights while leasing mineral rights to companies through cost-effective leases that provide an up-front bonus and royalties if production begins by a set expiration date.

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Understanding Oil, Gas, and Mineral Leasing Rights
 Privately held, Sentry Energy Production, LLC, is a Texas oil and gas company currently pursuing development and exploration in Ness County, Kansas. Among the most important aspects involved in Sentry Energy Production, LLC’s activities are the leasing of oil, gas, and mineral rights. Traditionally in the United States, mineral resources were granted to owners on a "fee simple estate" basis, which meant that if one owned the surface land, one also owned the mineral rights.
 This system led to transactions in which owners retained control of surface rights, while leasing mineral rights to mineral commodity production firms. The lease is a cost-effective way to explore for the oil and gas that may exist below a property without committing to the full purchase price of a property with uncertain prospects regarding the quality and quantity of oil that may lie there. Lease agreements typically include an up-front signing bonus for rights that expire on a set date. In addition, should oil or gas production commence, a royalty is paid to the land owner.

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Understanding Oil, Gas, and Mineral Leasing Rights

  • 2.  Privately held, Sentry Energy Production, LLC, is a Texas oil and gas company currently pursuing development and exploration in Ness County, Kansas. Among the most important aspects involved in Sentry Energy Production, LLC’s activities are the leasing of oil, gas, and mineral rights. Traditionally in the United States, mineral resources were granted to owners on a "fee simple estate" basis, which meant that if one owned the surface land, one also owned the mineral rights.
  • 3.  This system led to transactions in which owners retained control of surface rights, while leasing mineral rights to mineral commodity production firms. The lease is a cost-effective way to explore for the oil and gas that may exist below a property without committing to the full purchase price of a property with uncertain prospects regarding the quality and quantity of oil that may lie there. Lease agreements typically include an up-front signing bonus for rights that expire on a set date. In addition, should oil or gas production commence, a royalty is paid to the land owner.