There are changes coming to the oil, gas and mineral standard forms.
What led to these changes? Back in September 2021, the Standard Forms Committee voted to create a task force to take a look at the current oil, gas and mineral rights forms. The task force was made up of a group of people who are familiar with oil, gas and mineral rights. They were from different geographical locations and were well-versed in our current forms to be able to provide valuable feedback to improve them.
The original OGM Forms library that the task force looked was:
- Oil, Gas and/or Mineral Rights/Interests Addendum to Exclusive Listing Contract (Form OGMX – soon to be removed).
- Oil, Gas and/or Mineral Rights/Interests Disclosure (Form OGMD).
- Oil, Gas and Mineral Rights/Interests Addendum to Agreement of Sale (Form OGM).
As of Jan. 1, 2023, Form OGMX will no longer be available in the standard forms library, as recommended by the task force, who felt as though it was repetitive in nature with the OGMD and felt concerned about making the listing agent sign a document that was listing out disclosures. They went line by line through the forms and took relevant pieces from the OGMX and put them into the OGMD.
The OGMD has seen some formatting updates to make the questions more clear in paragraph 1 and 3. Paragraph 2 includes updated language regarding the seller’s knowledge of any excepted rights. Paragraph 4 is a new paragraph to confirm whether seller owns the surface rights. Paragraph 5 combines the surface damages paragraphs from OGMD and the OGMX to make sure the questions are being answered, while maintaining the information provided. We also took the Easements & Legal Issues and Valuation paragraphs from the OGMX and inserted them into OGMD. While this made the OGMD form longer, it streamlines the process for these types of transactions.
The OGM form was changed by adding additional information in paragraph 2(B) regarding a typical title search, since most title searches only go back 60 years, but many OGM rights that are transferred were well before the 60-year mark. Paragraph 3 adds surface rights into the list with oil, gas and mineral rights. Paragraph 8 is regarding assignment of interest. It originally said “agent,” not meaning the licensee, but someone working on the buyer’s behalf. The task force felt that it meant “agent,” meaning the buyer’s licensee. We clarified that by stating “or someone acting on buyer’s behalf” to make it clear that it could be the buyer’s attorney for example, not just their licensee.
Once the OGM Task Force made all of their recommendations, the Standard Forms Committee voted to approve those changes this fall. You can review all of these forms and their corresponding guidelines on the PAR Standard Forms page prior to their release on Jan. 1.