The opening paragraph of most leases is the granting clause. It will outline the purpose of the lease and describe the substances that can be explored and produced. Typically, exploring, drilling, mining and producing oil and gas and all other associated hydrocarbons in whatsoever nature or kind. The more liberal leases state the agreement covers all other minerals and other gases and their respective vapors.
Landowners should be hesitant about signing the more liberal type lease. Their concern should be with the royalty percentage share that is allocated to the other minerals. For example, landowners should expect a greater royalty from the production of uranium or helium than from carbon dioxide or sulphur. If the lease is silent on this matter, a landowner will receive the same royalty for all minerals that are produced.
As possible alternatives, landowners should enumerate the minerals covered by the lease to the exclusion of all others, e.g., all petroleum and natural gas and related hydrocarbons and no other minerals or substances in any form. Alternatively, landowners may amend the royalty clause to denote explicitly the percentage share they will receive for the production of any substances likely to be found in commercial quantities. Finally, the lessor may consider inserting an arbitration clause to ascertain the royalty for substances other than oil, gas, and associated hydrocarbons that may be discovered.