A Bulldog Checklist for Mineral Owners Who Want to Keep Their Leverage
Most oil and gas lease problems are permanent.
Not because the law is unfair—but because the document was signed before anyone slowed down long enough to fix what mattered.
If you sign first and argue later, you’ve already lost leverage.
Before you sign anything, walk through this checklist. Every item exists because someone, somewhere, learned the hard way.
1. Fix the Acreage Problem
Red flag: One well holds everything.
What to fix:
- Avoid leasing large acreage without retained-acreage limitations
- Subdivide by quarter sections where possible
- Require unused acreage to be released automatically
If development isn’t earned, it shouldn’t be rewarded.
2. Fix the Royalty Calculation—Not Just the Percentage
Red flag: “Market value at the well.”
What to fix:
- Demand royalty based on gross proceeds of sale
- Set a floor: not less than gross market value
- Eliminate “at the well” language
- Explicitly prohibit post-production deductions except production taxes
A high royalty percentage means nothing if the base number is manipulated.
3. Fix Post-Production Deductions in Writing
Red flag: Silence or vague language.
What to fix:
- Identify every allowable deduction, if any
- Specify how each deduction is calculated
- Reject open-ended categories like “marketing” or “reasonable costs”
Ambiguity always favors the drafter. Always.
4. Fix the Primary Term
Red flag: Long option periods with no obligation.
What to fix:
- Keep the primary term short (one to three years)
- Define what qualifies as “operations”
- Require real drilling activity—not paperwork
The primary term is the company’s option. Price it accordingly.
5. Fix the Savings Clauses
Red flag: Leases that never die.
What to fix:
- Limit shut-in rights by time and number
- Require timely shut-in payments or automatic termination
- Tighten dry-hole and cessation clauses
A lease without limits is a hostage situation.
6. Fix Assignment Rights
Red flag: You don’t know who you’re dealing with next year.
What to fix:
- Require notice of every assignment
- Preserve joint and several liability
- Ensure assignees are bound by the original lease terms
Assignments shouldn’t erase accountability.
7. Fix Warranty Clauses
Red flag: You’re guaranteeing title you didn’t examine.
What to fix:
- Delete title warranties
- Escrow bonus payments while title is confirmed
If the company wants certainty, it can do its own homework.
8. Fix Royalty Payment Timing and Remedies
Red flag: No consequences for late payment.
What to fix:
- Specify payment frequency and deadlines
- Preserve statutory interest and inspection rights
- Make late payment a real problem—not an inconvenience
Royalty payment is not a courtesy. It’s an obligation.
9. Fix Record-Inspection Rights
Red flag: “Trust us.”
What to fix:
- Confirm the right to inspect production and payment records
- Require reasonable response times
- Preserve fee-shifting remedies
If someone calculates your money, you’re entitled to see the math.
10. Fix Surface-Use Limits (If You Own the Surface)
Red flag: Broad surface rights.
What to fix:
- Limit surface use to development of the leased tract only
- Prohibit storage, disposal, or off-tract operations
- Use a separate surface-use agreement if needed
Surface damage should be negotiated—not assumed.
11. Fix Shut-In and Non-Producing Wells
Red flag: Paper production keeps the lease alive.
What to fix:
- Cap shut-in periods
- Require termination if shut-in payments lapse
- Suspend shut-in rights when nearby production exists
A well that doesn’t produce shouldn’t control your minerals.
12. Fix Pooling Expectations
Red flag: “It won’t apply to you.”
What to fix:
- Understand compulsory pooling rules
- Preserve hearing and objection rights
- Know the penalties before declining participation
Pooling is legal reality—not a threat.
The Bulldog Rule
Oil and gas leases don’t fail because owners are unreasonable.
They fail because owners sign before they understand where leverage lives.
Fix the document first.
The rest follows.