Colorado Oil & Gas Lease Being Drilled - I Haven't Signed

My mineral rights are to 80 acres in La Plata County, Colorado. 40 acres are in one section where the well has been shut-in for over 20 years. In May 2008 I signed a three year lease and received a bonus. When the lease expired, I contacted the same production company about renewing the lease. He seemed anxious to get the paperwork to me, but after waiting nearly a month it still had not come. I finally made contact with the land technician and was told that production is taking place on the section where the other 40 acres is located and curative measures would need to be taken. He expressed shock that that this could have been overlooked. I found out that the shut-in well will be abandoned and a permit has already been approved for drilling 4 wells in its place. Now they are saying I will have to wait and see how the Title Opinion reads before they will consider a new lease. My question is, when they signed the lease in 2008, would that not have voided the previous one lease(the one that kept going as a shut-in for years and years)? The section already producing, had been since 2003. I hope this isn't too complicated to understand. I'm starting to think I am the only one this has ever happened to. I think they made a mistake and they are hoping it will just go away.

Any feedback would be greatly appreciated.


Making sure I understand correctly. From what you have seen, it appears that the operating company may be producing and has permitted four wells on the acreage that you beleive has an expired lease.

I am not a landman, I am an engineer, but have seen this type of thing happen. If I were you, I would keep very quiet and lay low until the wells are drilled. I would not cash any royalty checks from the acreage you believe has an expired term. If indeed wells have been drilled or production established on unleased acreage, you would have significant influence on the company. You would have to hire a lawyer, but you might be able to argue to the courts that a fraction of each well drilled (corresponding to your mineral acreage) belongs to you (not just the royalty, but the working interest as well). You may become the proud owner of a share in four wells without spending a dime.

The operating company would be very anxious to smoothe over their error and might offer you a lease in arrears in order to prevent you from doing what is described above. If you don’t want to go to a lawyer, you might be able to negotiate exceptional terms on your lease and a very large bonus payment.

Wait until all the wells are drilled before digging deeper.