I own some legacy wells in Texas, XTO, Valence Operating, etc. and a couple of small operators. One of these small operators has stopped operating the wells I have an interest is because he either thinks they are close to depletion or because he can’t afford to operate them. My question is, if he caps them because he can’t afford to operate them, doesn’t this nullify his lease? I know you all are going to say, “simply check the lease stipulations” but I can’t because nobody on the planet can produce a copy of the original lease (3rd gen legacy) only a piece of paper selling the lease to my operator for ten bucks that included about twelve other owners. I only see about eleven dollars a year royalty from this operator and wonder how the heck he can keep operating with such low revenues. Well, not he’s apparently not operating. HELP!!!
The missing lease is one reason why no mineral owner should ever sign and hand over the only copy of the lease. It is important to hang on to all leases and other documents in a file. Are you sure that no one can find the original lease? Decades ago, almost every lease was recorded in its entirety. The practice of only recording a memorandum of lease only arose in recent years. If you look at the assignment, it will cite the recording data (volume or book and page), as well as the original lessor and original lessee and date of your lease. Some counties had separate lease books and deed books, etc. You can then obtain a copy of the recorded lease. You need to obtain a copy of each lease to be sure whether it holds all depths or only partial depths. Keep in mind that if the lease has multiple wells and operators, then it will stay in effect until every well ceases operating. If your small operator is under the same lease as XTO, then the XTO operations will hold the lease.