Drilling Without a Lease!

A company is drilling on my property without a lease! They never paid me draft money to drill but yet they send me little checks. I spoke to the Landman & he said there's nothing I can do

If you never signed a lease, there is NO arbitration clause.

1. Do NOT cash the checks.

2. Hire a lawyer.

3. If there is any equipment or people on your land, call the police for trespassing.

4. Have any persons arrested.

5. Have any vehicles towed.

6. Good luck.

In California, and likely Colorado, an oil company may drill and produce your minerals IF it has the right to do so from any other mineral owners. Typically, the authority would be given via a lease. Based on your statement that they have been sending you checks, I presume that this is what is occurring.

The reason that they have this right is that any owner has the right to produce. So, if the oil company has a lease from any or, more likely, a majority of the mineral owners then it can drill and produce even though you did not enter into a lease with them.

Your interest is treated differently than if you had signed a lease with the oil company, however. Thus, you may wish to contact the oil company and ask to sign a lease. This way you will be paid a royalty share, which does not pay for production costs, rather than being considered a working interest owner, which interest must pay its share of the costs of production.

Hope this helps.

Do you own minerals, royalty or both?

Before you call law enforcement to file trespassing charges or have vehicles towed be sure you are in the right, if not you could possibly open yourself up to a lot of liability.


If I owned minerals or royalty would not matter which one to me as long as I also owned the surface rights. If there is no signed contract they would be trespassing.

Thankyou. That did help! There are other owners & the decimals are divided between all of us

There are other owners, my siblings. We inherited properties from my Dad! Yes we own the minerals & yes we are getting small checks from Statoil. With no new lease! They said they took over Brigham oil. My Dads lease was up with them in 2010. Not sure about the arbitration clause?

Also my interest is in Montana

How long have you been getting the checks? Do you also own the surface? Linton

In Texas, if you only own the surface and/or royalty all the company has to do is notify you. Royalty signs no lease and/or contract.

Debbie needs to check with an attorney about the laws of the state when her interest is located. Your advise in Texas would get her sued.

Don’t know much, new to all of this, surface?? Checks for a year but very seldom! One was for $3.04. What a laugh! Thankyou, what does surface mean?

Minerals are below the surface. The “surface” just means the land surface, like where a cow eats grass off of, or you build a barn, hehehe. Sometimes the oil company will wait to send out a check until the amount of production reaches a certain amount. When did your father die?

Not sure if we own the surface! I’ll have to check with my brother. Dad died in 2012

Was there a well already drilled on the property before your dad died? Where is this property?

Richland County Montana. Don’t think so. My Dad never got checks from Great Northern Exploration. Which is Brigham! Statoil is the company now! Dad had a lease with Great Northern that was over in 2010 & then all of a sudden we’re hearing from Statoil

The reason I ask is, once a well is drilled and producing, you don’t get another lease unless production stupid for some reason for some period of time. So I was wondering if maybe a well was drilled and producing, but not enough for checks to go out, if that makes any sense. They may drill other wells, too, after the first one, and you wouldn’t have another lease, the land would be held by production. But I can’t imagine them drilling another well if the one you’re speaking of is not producing enough to pay you monthly. Linton

Yeah not sure! I do know, if there Is a producing well & the lease runs out & the same company what’s to re-lease, they have to pay a re-lease amount! Like I said I’m so new to all of this ! I don’t understand the term arbitration, if it’s not on a lease

I think I’m not explaining it to you very well. Once a well is drilled there are no more leases. If they lease it and don’t get it drilled by the time the lease is up, then you can release it. But once a well is in place, that’s it.

And, like you, I have one where I get a check every quarter and I’m lucky if it’s for more than the cost of the postage to mail it. I also have one that I usually get a check at the end of the year before tax season for $20-30. Linton

Ok I understand that! My question was, how can Statoil be sending us checks with no lease agreement)) we have no physical paperwork! I guess I’m being dumb! But I used to look at all of my Dads Leases & they were signed by him. All of his are old & gone! We have no paperwork