I purchased a property about 2 years and inherited a oil and gas lease with that purchase. That lease and its option to renew for a further 5 years , which had been exercised ,expired last week. Do I need to do anything to make sure that the lease is no longer valid or is there some sort of legal requirement to make sure that I now own the oil and gas rights fully.?
Thank you in advance for your advice
Vic
You do not need to do anything. Just wait for it to be leased again pretty much.
Thank you
What county?
Tucker
I would still contact the Lessee and request that they file a release with the County Clerk in the County that the land is located in. It is the only way to truly have your title clear of the lease in any of the states that I am aware of. That said, it is common for an Oil and Gas Lease to not be released and it typically causes no serious issues for the land owner.
Thank you for that advice
Im thinking it might be best to write a letter to the company and expect no reply but at least they won’t be able to claim that I was complacent about the lease continuing. Or is it better to let sleeping dogs lie?
I would definitely send them a letter. If you don't get a response, you could file an Affidavit of Non-Production, but it doesn't carry as much weight as a Release of Oil and Gas Lease.
A good landman will probably be able to see that your old lease is expired if there has been no production, and be willing to take a new lease from you as thing are. But you will likely need a release from the former lessee before you can lease again if there is any doubt about production/maintenance. Read your old (expired) lease, most standard lease forms explicitly require the lessee to provide a release to you upon written request. The laws of your state may also require them to provide a release as well.
First thing I would do is to look at my lease and see if there is a "Release Clause" in the lease. Some have none, so have 30 or 90 day and then 30 days after a demand letter. My recommendation would be to send a letter asking for your release, otherwise your lease is still on file and unless a landman is really interested, they may miss you. A good landman really interested in your area probably would not miss you; but, why take a chance.
Try this, you can clean the wording up to suit your needs and desires as long as you get the correct information in it. And by all means, send it certified return receipt requested.
196-LeasereleaseDemandLetter1172014.docx (13.7 KB)Thank you for that information
Dear Mr. Gross,
With respect to some of the other commentators, the lease may not have expired. Do you know if it was pooled with other lands and there is not a well currently drilling or waiting on a pipeline connection or division orders to be sent out? If the primary term expired just a short period of time ago, a well could have certainly been drilling through the end of the primary term. If a well was drilled through the end of the primary term and was a dry hole, the Lessee might have the right to drill another well. Did you examine that portion of the lease form?
You might find this blog post illustrative:
http://www.mineralrightsforum.com/profiles/blogs/so-when-does-an-oi...
To make certain you maintain a clear title, send to the Lessee a Demand for Release letter. And get the Release. Mr. Bigfoot uploaded a sample for you. [Thanks, Mr. Bigfoot] Landmen running title love to see Releases of leases. It puts their mind at ease.
Best,
Buddy CottenThank you
I checked my lease. It is a lease in which the primary term of five years had been optioned for another five years. That 5 year extension option recently expired . There is no release clause included in the lease
But there is no automatic extension either
I will follow your advice ( Mr Bigfoot to) and send a letter requesting a release and see what happens
Thanks for your thoughts
Vic