N.Y. General Obligations Law § 5-333: Validity of oil, gas or mineral land leases

§ 5-333. Validity of oil, gas or mineral land leases. 1. Any oil, gas

or mineral land lease given on land situated in this state shall be

deemed to incorporate subdivisions two and three of this section and any

provisions to the contrary shall be void and unenforceable.

2. Any oil, gas or mineral land lease which provides for delay rental

payments, such payments being periodic payments to the lessor for the

right to delay drilling or excavation upon the leased property, shall

provide that the first such payment shall be due and payable no later

than one hundred eighty days after the effective date of the lease. Any

bonus or up front payment made by the lessee equal to or greater than

the first delayed rental payment shall constitute compliance with this

subdivision.

3. Any oil, gas or mineral land lease shall contain a statement

advising the lessor of the provisions of section 15-304 of this chapter.

Such statement shall be printed in at least ten point bold type and

shall read as follows:

IF THIS LEASE BECOMES FORFEITED, TERMINATED OR EXPIRES, THE LESSEE, OR

IF THE LEASE HAS BEEN ASSIGNED, THE ASSIGNEE IS REQUIRED TO PROVIDE A

DOCUMENT CANCELLING THE LEASE AS OF RECORD, AT NO COST TO THE CURRENT

LANDOWNER. IF THE LESSEE OR ASSIGNEE FAILS TO CANCEL THE LEASE, THE

CURRENT LANDOWNER MAY COMPEL A CANCELLATION PURSUANT TO SECTION 15-304

OF THE GENERAL OBLIGATIONS LAW.

4. For the purposes of this section, the term "mineral" shall not

include salt, as defined by subdivision eighteen of section 23-0101 of

the environmental conservation law.

5. On or after January first, two thousand six, any oil or gas lease

shall contain the following statement printed in at least ten point bold

type:

THIS IS A LEASE OF OIL AND GAS RIGHTS, NOT A SALE, CONTAINING TERMS

THAT MAY BE NEGOTIATED BY YOU. YOU HAVE THE RIGHT TO CANCEL THIS LEASE

WITHIN THREE BUSINESS DAYS AFTER EXECUTION OF THE LEASE BY NOTIFYING THE

LESSEE THAT YOU HAVE CANCELED THIS CONTRACT. IN ORDER TO CANCEL THIS

LEASE, YOU MUST EXECUTE A NOTICE OF CANCELLATION IN THE FORM PROVIDED

BELOW, MAIL IT TO THE LESSEE AND REFUND ALL AMOUNTS PAID TO YOU BY THE

LESSEE WITHIN THE THREE-DAY CANCELLATION PERIOD. THE MAILING MUST BE

POSTMARKED WITHIN THE THREE-DAY CANCELLATION PERIOD TO BE EFFECTIVE.

NOTICE OF CANCELLATION

I/WE HEREBY CANCEL THIS LEASE.

DATED:

SIGNATURE(S):

THE PERSON PRESENTING THIS LEASE TO YOU IS [ ] NOT [ ] A MEMBER OF

(name of organization) AND THEREFORE IS [ ] IS NOT [ ] SUBJECT

TO A CODE OF CONDUCT. IF THE PERSON PRESENTING THIS LEASE TO YOU IS

SUBJECT TO A CODE OF CONDUCT, A COPY OF THE CODE OF CONDUCT MUST BE

PRESENTED TO YOU WITH THIS LEASE. IF APPLICABLE, THE CODE OF CONDUCT

PROVIDES A DISPUTE RESOLUTION MECHANISM FOR ANY DISPUTE THAT YOU MAY

HAVE REGARDING THE MANNER BY WHICH THIS LEASE WAS PRESENTED TO YOU. IF

YOU HAVE ANY SUCH DISPUTE, YOU MAY INVOKE THE DISPUTE RESOLUTION

MECHANISM OF THE CODE OF CONDUCT BY CONTACTING THE PERSON OR PERSONS

DESIGNATED IN THE CODE OF CONDUCT. THE FAILURE OF THE LESSEE TO PAY ANY

ROYALTIES TO YOU AS REQUIRED UNDER THE TERMS OF THE LEASE FOR A PERIOD

OF FOUR CONSECUTIVE MONTHS OR MORE SHALL BE A DEFAULT UNLESS OTHERWISE

PROVIDED BY LAW, AND WILL RESULT IN CANCELLATION OF THE LEASE APPLICABLE

TO THE TARGET FORMATION OF THE WELL WITHIN THE SPACING UNIT, FOLLOWING

WRITTEN NOTIFICATION TO THE LESSEE OF YOUR INTENT TO CANCEL AND SIXTY

DAYS FOR THE LESSEE TO CURE THE DEFAULT. IF THE LESSEE HAS A BONA FIDE

DISPUTE REGARDING THE GROUNDS FOR CANCELLATION, SUCH DISPUTE AND THE

REASONS THEREFOR MUST BE PROVIDED TO YOU IN WRITING OR THE DEFAULT MUST

BE CURED WITHIN SUCH SIXTY DAY PERIOD, OTHERWISE THE LEASE SHALL BE

CANCELLED.

6. The provisions of subdivisions one, two, three and four of this

section shall apply to leases entered into on or after January first,

nineteen hundred eighty-five and the provisions of subdivision five of

this section shall apply to leases entered into on or after January

first, two thousand six.