Tag Archives: oil
Oil and Gas Leasing
We may not think much about it because generally they are both under the same category as mineral rights leasing. But oil and gas leasing are actually different from each other.
The first obvious difference would be concerning their forms. Gas, unlike oil which is liquid, is first processed from its gaseous state and liquefied for transport. For the transport a network of pipelines is used. The liquefied gas is transported from its well and passed through a natural gas pipeline. This is because gas is not always used in the area where it is found. A network of pipelines had to be made as a means of transport.
Natural gas can either be intrastate or interstate. It is called intrastate gas if it is produced and consumed in the same state. If it has to be transported from one state to another then it is considered as interstate gas. Interstate gas is federally regulated.
For oil or crude oil, local refineries are often used. So there is not much of a transport issue when it comes to oil production, consumption, and leasing.
The different means of transport for oil and gas would create a significant difference in oil and gas leasing. Transporting gas along the pipeline means a more solid capital investment. The price and demand for gas is also influenced by the season and need for natural gas. This makes gas leasing much harder to regulate and measure than oil leasing.
The gas sales contract is also a factor in gas leasing. The price of gas was first regulated by the federal government. During this time, gas contracts were held with long-term commitments and the contracts could last as long as ten to twenty years. As time went by, the contracts became much shorter in duration, due mainly to the deregulation of the gas prices. Oil leasing, on the other hand, do not suffer the strains that gas leasing has to undergo since it has never had the same regulations as gas. The transport of oil to local and regional refineries also did not prove as troublesome as the transport of gas did.
Regarding royalties, it is easier to to offer royalty with oil leasing. Oil royalties can be paid in either oil or cash. The owner of the land can opt to receive oil from the oil company and market it himself. Most owners, though, still go for oil royalties in cash at the posted price of the oil.
This is not so for gas royalties. Gas royalties are usually paid in cash. This is because gas is more difficult to offer a royalty due to its gas-to-liquefied state. Its volatility makes cash the best option for landowners.
The price of gas is also difficult to give a solid value to because of the fluctuating markets for gas. Many landowners would go for gas royalty in market value, and ensure that the gas royalties are paid in cash.
Despite their differences, oil and gas leasing terms for the royalties can be negotiated in a similar way. Land owners can specify separate royalties for oil and gas production, and they can put in a due date for the receipt of royalty payments. They can also put in an interest charge for late payments.
Apply for Gas Credit Cards and Cut your Gasoline Expenses
Buying gas is getting more expensive, but you can find gas cards for most gas stations where you will earn a rebate on every gas purchase. Oil companies typically have a link to the gas card application on their website or you can pick up a credit card application at a lot of the gas stations.
Major credit card providers also offer a gas card of their own and the advantage of submitting an application for one of those cards is that cash back is being earned at any gas station around the country, which ensures you are getting the lowest price instead of selecting a specific brand of gas that may carry a higher price tag. An example of a gas card not limited to a specific brand is the Discover Open Road credit card that gives you 5% cash back on all gasoline purchases and even includes auto maintenance purchases, but only up to a combined total of $100 per month.
If your goal is to apply for gas cards that will save you the most amount of money you should not only read the terms and conditions for each card, but also carefully evaluate how much gas you expect to use every month. Let’s say you normally spend around $80 on gas on a monthly basis. The best solution in this case is to always have the Discover Open Road card in your wallet, because you always earn 5% and you can pick and choose between any gas station. The oil companies normally do not have restrictions and you could elevate the savings significantly if your usage ends up costing you more than $100 per month, but remember that the oil company needs to have a good coverage of gas stations or you could end up spending more money driving around finding a place to fill up your vehicle.
Paying the credit card bill in full each month is vital, because gas cards can be associated with higher interest rates than regular cards to make up for the generous rebate, which also means that it will end up costing you more if you are subject to finance charges due to the fact that you carry a balance.
The intention of having a gas card is to cut down on gas expenses and if used correctly this is precisely what you will end up doing, but remember to never pay late or exceed the credit line otherwise you will end up giving the credit card company all the savings you gained from the card in the first place.