Greetings all—I’m new to all this, and would appreciate it if someone could explain to me the concept of lease busting—what it means and what the point of doing it is. Thanks
Mr. Sponberg, I believe you mean Title Busting. Buddy Cotten wrote an excellent blog on that subject and that blog can be found near the top of this page where it says blogs. I think “Title Busting” will answer the hows and why. Hope this helps.
Thanks for that. I have read Buddy Cotten’s blog, which was very helpful. But I thought I had heard the term “lease busting” and was assuming that was something different. Does that sound possible?
r w kennedy said:
Mr. Sponberg, I believe you mean Title Busting. Buddy Cotten wrote an excellent blog on that subject and that blog can be found near the top of this page where it says blogs. I think "Title Busting" will answer the hows and why. Hope this helps.
There could be an activity called lease busting, but with more than 100 years of practice I think the oil industry has leasing down to a science and have wording to cover the great majority of faux pas they might make, so you may recover money damages but the lease will stand. I myself have a suit against a lessee, Altair Corporation, because they never paid the signing bonus and recorded the lease.
The quality of field landwork is an inverse relationship with the price of hydrocarbons. For a block or title buster, this is a good time. It is really hard to beat a smart, well funded local blockbuster.
Block busting, lease busting or title busting usually all works in the favor of the mineral owners. It’s increases the competition, increases the bonus money, royalty terms and the lease and it’s addendum’s. Not to mention it puts the landmen in a position to have to work harder and faster. A mineral owner can use this to his advantage!
I guess I just get confused with the terms. I thought block busting was the leasing of mineral acres in an area where one knows that an operator/lessee is trying to garner a majority / monoply. Title busting, I thought was leasing acres that were overlooked or attributed to the wrong person. Neither of the above activities would involve acres that were already legitimately leased. I would expect “lease busting” to involve net mineral acres that were already leased, and might possibly involve exploiting some flaw in the lease ? Could anyone shed any light on this ?