Am I top leased or not?

On October 10, 2007 I signed a lease with Company A. It was for 2 years ending on October 10, 2009.

Then in August 2008 Company B top leased the Company A lease. The only reference to the top lease is at the top where is says "Paid Up Oil and Gas Top Lease." Other than that it says it shall remain in force for a term of 3 years. Which would end the lease in August 2011.

An actual top lease would begin in October 2009 and end in October 2012.

Strange thing, my attorney at the time didn't catch this!

Therefore where do I stand? I know Company B intended for this to be a top lease but they never mentioned any specifics of a top lease in the top lease. So I'm thinking it will end on August 2011 freeing me up to top lease again.

I will be letting my attorney take a look but until then, has anyone else experienced something like this?




Not being able to read the entire leases involved, I will guess from what you have said, that the top lease would have been effective on October 10, 2009 and will expire on October 10, 2012 if it is a 3 year lease. Since Company A had it leased until October 10, 2009, they could have begun drilling operations anytime prior to that date and the lease would be held by that operator. Again, I'm just reading between the lines from what you have said in your post.

Without seeing all the language in the lease, it is entirety possible that the top lessor violated the rule against perpetuities (formerly Shelly's Case), if the lease is in Texas lands. You might could scan the so-called top lease and let us take a look at the language. Violating the rule against perpetuities voids the document.