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Simple English definitions for legal terms
free-gas clause
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A quick definition of free-gas clause:
A free-gas clause is a part of a contract that allows the owner of a property to use the gas produced from that property without having to pay for it. This is often used in colder states where gas is used for heating and lighting. However, there are usually limits on how much gas can be used and for what purposes.
A more thorough explanation:
A free-gas clause is a provision in an oil-and-gas lease that allows the lessor or surface owner to use the gas produced from the leased property without any charge. This clause is commonly used in colder states where gas is used for domestic heating and light.
For example, if a landowner leases their property to an oil and gas company, they may include a free-gas clause in the lease agreement. This clause would allow the landowner to use the gas produced from the property for their personal use without any additional cost.
However, free-gas clauses usually have limitations on how much gas can be used and how it can be used. For instance, the clause may limit the amount of gas that can be used to 300 MCF per year and restrict its use to domestic heating and light only.
Overall, free-gas clauses provide a benefit to the landowner by allowing them to use the gas produced from their property without any additional cost.