Landowner Guides

Common Terms

Barrel – The unit of measurement for oil used in the industry. One barrel equals 42 gallons.

Delay rental – An annual payment made to the lessor usually on a per acre basis prior to a well being drilled.

Drill Lease – This is a lease that has to be acquired from the landowner that the well unit will be located.

Free gas – An annual allocation of gas to the lessor for domestic heating purposes.  This is commonly 200,000 cubic feet or more per year and goes to the person upon whose land the well is located.

MCF – One thousand cubic feet; the unit of measurement for natural gas used in the industry.

Non-drill Lease – This is a type of lease that is acquired from any landowner that is part of the unit, but does not have the actual well located on their property.

Pooling or unitization – A provision that allows the lessor’s land to be combined with adjoining lands to form a drilling unit.

Primary or initial term – The length of the lease in years, typically 2 years or more.  The longer the term, the less likely a well will be drilled shortly after signing a lease.  Royalty – The amount of production received by the lessor, usually one-eighth (12.5%) of the sales of oil and gas from the well.   If there is more than one landowner in the drilling unit, the royalty is shared according to the amount of land each lessor has in the unit.

Secondary term – The length of the lease after a well is drilled, usually for as long as the well produces in commercial quantity.

Shut-in royalty – Payment that is received in lieu of production royalty when the well cannot be produced due to production problems or other factors.

Signing bonus or cash bonus – a one-time payment paid to the landowner upon signing of the lease agreement, typically a large drill-lease.  Non-drill leases do not normally receive bonuses in addition to the royalties.

Spud fee – A one-time payment paid upon signing the drill lease or prior to commencement of drilling the well.

Termination – End of the lease due to expiration of the primary term or when commercial production ceases and the well is plugged.

Decibel Levels

Sound Levels of the Oil and Gas Industry
Drilling rig on rig floor 90 db
Drilling rig @ 100 ft 80 db
Drilling rig @ 200 ft 70 db
Drilling rig @ 300 ft 60 db
Pump jack running in production 75 db
Pump jack running @ 100 ft 45 db
Gas well running in production 65 db
Common Environmental Noise Levels
Normal Conversation 60-70 db
Average Cell Phone Ringer 75 db
City Traffic (inside car) 75 db
Power Mower 107 db
Power Saw 110 db
Jet Engine @ 100 ft 140 db

Location Size

  • Average – 100 feet X 100 feet
  • Large – 150 feet X 150 feet
  • Tank battery and meter run – 25 feet X 40 feet
  • Pump jack – 150 feet X 150 feet

Links to Web Resources

Ohio Oil and Gas Association

Ohio Oil and Gas Energy Education Program

State Review of Oil and Natural Gas Environmental Regulations 

ODNR Landowner Info

House Bill 278 

Ohio Department Of Natural Resources

Cutter Oil has a proven ability to get the most out of our wells. Our wells produce more in the beginning and have a much longer life than any competitor, ultimately translating into more money for our landowners.

 
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