Individual landowners typically negotiate a private
agreement with an oil or gas company that is interested in exploring for and
possibly producing petroleum on their property. These agreements are known as
“oil or gas leases” and typically extend for a period of several years. Landowners
are often compensated by receiving rental fees for the number of acres in the
lease and a one-eighth royalty payment on the value of the oil or gas produced.
Information about leases and leasing can be obtained from a variety of sources
including the Extension Service of Purdue University, the American Association
of Professional Landmen, and many oil and gas legal professionals. These
groups and agencies are able to assist the concerned landowner in understanding
their rights and opportunities relative to oil and gas exploration and production.