We have producing wells of which we receive pmts...we just received a division order from a new company and it looks like 3 new wells...The oil company is asking us to sign division orders (We verified entitled %'s...looks good) , but they did not ask us to sign a new lease with this new oil co? Is this common, and do owners ever sign a new lease in this situation, and perhaps ask for upfront signing bonus? We just don't want to be missing the obvious...
Should we get an attorney?
Lynn:
Did this new company purchase the existing leases whereas these leases would already cover these new wells? Be sure to gather all your paperwork and verify everything in your existing leases.
Once a well has been drilled and continues to produce continuously, more or less, it remains forever under the terms of the original lease. The original lease probably allows the Lessee (the oil company(s) to sell to whomever they want, and each time the well is sold to a different company, that company will likely send out division orders (happens all the time). The only time you would be asked to sign a new lease would be on property not under lease, property whose lease has legally expired (which will be based on the terms of the original lease). Hope this makes sense. Some producing wells will exchange ownership (Lessee) over and over and over again. For all the Lessors (mineral owners)who do not sign the new division orders or for those Lessors who do not keep a current address on file with the current operator, those Lessors payments quite often will terminate, until such time as they notify the current operator. People lose a lot of money this way. But I digress!