Capital Expenditure (CAPEX)
Amount spent to acquire or improve the capacity or capabilities of a long-term asset such as equipment, buildings or land resource. For example: the amount of money a developer pays to purchase solar panels or lease a property would be considered a Capital Expenditure (Capex).
Allows a buyer to undertake searches and research a property’s ownership chain of title to determine if the title is marketable and non-encumbered. Due Diligence periods have a set period of time and buyers have the opportunity to terminate the contract as a result of receiving any adverse results.
Professional landmen interact and negotiate directly with landowners to purchase or lease the surface or mineral rights on behalf of a development company. Generally Landmen work in the Solar, Wind and the Oil and Gas industries.
Contract by which one party conveys land or resource rights to another for a specified time, usually in return for a periodic payment. Different types of land and mineral resources can be leased for example one can lease solar, wind, water, mineral rights, etc.
The cash consideration that is paid by the lessee for the execution of an oil and gas lease by a landowner. It is usually based on a per acre payment.
Contract by which one party agrees to grant the exclusive option to execute a pre-negotiated lease agreement for a certain amount of time. The pre-negotiated lease agreement outlines the lease royalty, bonus and primary term a property would be subject to if the option is executed. The Lease Option expires worthless if not executed on time. Lease Options will commonly be offered to landowners with an upfront bonus cash payment.
Person who holds the lease of a property; the lessee owns the right to operate on and develop a property or resource owned by the lessor
Person who leases or grants operating rights of a property to another
Operations & Maintenance Expenditure (OPEX)
An Expense that an asset incurs during its normal operations. Often abbreviated as OPEX. Expenses that are required to maintain and operate an asset.
Purchase Sale Agreement (PSA)
An agreement between a buyer and a seller of property, company stock, or other assets.
Interest retained from the output of a property when the owner enters into a lease agreement. Royalty interest entitles the property owner to receive a portion of the production or a portion of the gross revenue from sold production.
Represents the portion of capital expenditure an asset owner is responsible to pay to fund development or maintenance projects.