Operator Liability Under Federal Oil and Gas Leases

Description

Federal oil and gas leases have a different ownership structure than other oil and gas leases, imposing heavy responsibilities and obligations on operators. Regulations involving federal oil and gas leases, including the terms of such agreements, require strict adherence to rules and reporting requirements.

A lessee of a federal oil and gas lease, as opposed to a fee lease, holds interest in both record title and operating rights which are often severed. Holders of record title have lease assignment and relinquishment rights. These holders often assign or transfer the operating rights to a third-party who would then be authorized to drill and conduct operations that produce the leased substances.

Operators of federal oil and gas leases must comply with the lease terms and all applicable federal and state regulations. Noncompliance is subject to assessments and potential penalties. Oil and gas counsel need an in-depth understanding of the challenges faced by operators, including those involving drilling and producing obligations, drainage protection, well abandonment procedures, environmental issues, and reporting requirements.

Listen as our panel discusses critical aspects of federal oil and gas leases, record title and operating rights holder liability, and offer guidance on overcoming challenges in reporting and maintaining compliance with federal and state regulations.