Lease expiring...I think!


#1

I have Mineral Rights in Dewey County, OK that were leased in 2016 and I believe are up in September. Wondering how I can find out for sure and to see if my next option should be to re-lease or sell.

3-18 NORTH - 16 WEST


#2

Tapstone Energy drilled the Sportsman 3-18-6 1H well in 2016. It has been online since June of 2016. You should have been paid on it. If not, you should contact Tapstone. If you have been getting royalties, then you are in what is called the “secondary” term of the lease and will be held by that lease until production ceases in the section which could be decades. If they drill more wells before the first one dies, you will be held by the original lease.
Let me know if you need Tapstone address. You should have gotten a Division Order from them. If not, they may be holding money for you.


#3

Yes I was recently paid for everything since they began. However I did sign a two year lease so I was just curious if it would expire in September 2018.

Thanks


#4

If the lease is producing, it does not expire. Leases have two terms. The first is called the “primary term”. That is the two year time period in which they had to drill the well. They complied with that requirement. The producing well moves the lease into the “secondary” term which will continue until the production in the section ceases (probably going to be a LONG time.)

Here is a portion from my lease which is probably similar to yours: (Primary) “If the lessee shall commence to drill a well or commence reworking operations on an existing well within the term of this lease or any extension thereof, or on acreage pooled therewith, the lessee shall have the right to drill such well to completion or complete reworking **operations with reasonable diligence and dispatch,” (Secondary)-“and if oil or gas, or either of them, be found in paying quantities, this lease shall continue and be in force with like effect as if such well had been completed within the term of years first mentioned.”