Form 1003A

Hello All,

I received an offer to lease however the bonus payment has a contingency on the timing of the payment. The payment is suppose to occur within 15 days when a Form 1003A is filed with OCC or a release of oil and gas leases filed with the county.

What is a Form 1003A? Who would file the Form? It feels like there should be some outside date what one of these conditions needs to happen by. I don't want to have my mineral rights lock up indefinitely...

Any help would be greatly appreciated. Thank you

Form 1003A



Clint Liles

Brad, I wouldn't sign anything until the dust has well and truly settled. Operators can be horribly bad at making the paperwork run on time. 6 months to a year late isn't uncommon at all.

Agreed. What does this FORM imply is (or could be) happening to the well right now?

Thank you.

Thanks Clint. Why would a company make a bonus payment contingent on this? What do they gain?

It is a temporary exemption from plugging. Presumably the primary term of your lease has expired or will expire very soon? The potential lessee seems to want reassurance that continuing operations are not "saving" the lease, for the previous lessee.

The check box next to "Is well located on a valid or producing lease or unit?" would tell the prospective lessee a great deal, namely whether or not the previous lessee considers the lease producing/valid. Not as good as a release, but you might never get a release.


they are trying to top lease an HBP lease. I wouldn't touch it as you will probably be creating a liability for yourself.

Take RW's advice. Wait until the dust settles. Turn it back on them and tell them you won't consider leasing until they provide you with evidence that your land is no longer under lease and get it recorded.

Thank you Gary and RW.

I believe my lease is about to expire. For about 10 years I've been getting close to nothing. The last 5 years it's only been about $5.00 and I've got over 40 acres. Recently, I just received a shut-in royalty check for a whopping $2.00. That check has a period of July 2016-July2017. I also thought there was law that prevented producers from paying an insignificant amount for a shut-in royalty just to hold onto to the lease. May be they are thinking about protesting that? I'm guessing and hoping that after July the original lease is unquestionably done?

There is also reason to believe that my current lease isn't for all geological zones.

The former seems like what could be playing out here...

Thanks again everyone.

Brad, You may have to prove that your lease expired. Keep a copy of the lease or get one from the courthouse. the lease defines when it terminates in at least 3 places. If the payor is trying to breath life into a dead lease, the court will be on your side. I sure wouldn't cash a shut in royalty check if I were you. Shut in payments are reserved for wells "capable of producing in commercial quantities" Ah! there is that economic constraint again. See if it is in your lease.

Gary H.

Let me know if I can help with production records thru PM.