What is the proper process/form to insure the asset is not Held by Production or under lease when the primary term expires on a lease or the operator fails to maintain the terms of the lease. My concern is that potential future companies who are running the titles will find the old lease and assume that production is ongoing or that the operator has maintained the terms of the lease (ongoing "production efforts" have been dormant for more than 90 days, etc.), should a well have been drilled and in production for a short term, etc. I have considered filing of record a document something like a "Release of Lease" or similar document. I am hopeful to find a form to accomplish this.
Thanks.
An Affidavit of Non-production can be filed stating where the lease property is, where the lease is recorded in the county records, the amount of time there has been no production, that sort of thing. I am looking forward to learning more about this topic.
What state are you thinking about?
Dear Mr. Botard,
Have your lease form state that a Release of Lease will be filed of record within 30 days of the expiration of the lease or a portion thereof.
You filing a Release does not do any good. You have no standing to release the lease.
Mr. Cotten, thanks for your reply but…“No standing”??? If I don’t have the ability to call out the operator for not honoring the terms of the lease, who does??? I ask from ignorance of this issue. So, if the original lease does not have a provision to implicitly require the operator to “file” a release, it goes on until they decide to do so??? I am very confused.
Mr. Botard,
As I understand it, the one holding the lease, the lessee, has the standing to do the releasing. If the lessee won't to it then you might need to do something else such as file the affidavit of non production. We have had to do that recently for an old lease.
Once filed, at least other potential lessees can see that, as you see it, the lease is not held by production. Beyond that I don't know. We had another company ready to lease us and they helped us with this.
Dear Mr. Botard,
Ms Mosley has it right. You granted the rights to explore to the Lessee under the lease. It is up to the Lessee to release their rights in that lease, or portion thereof. Some Lessees just do not file a release of record. We have it in our lease form that they will release acreage as it expires.
Thanks Ms. Mosley and Mr. Cotten. I suppose I will have an attorney generate a “form” to document the status of the lease, expired, non producing, etc. to document of record that condition as I am certain none of my leases have language that the lessee will file a release.