Lease question

General Mineral Rights Discussion
1

Ok I got another mineral lease question… I was contacted last week by landman who is leasing for oil production company… I inherited minerals from my Gpa and shows I have 4 quarters of minerals 3 in 1 section 1 in another in the OK Panhandle… The lease they offered is for the single section(sec8) in the section (sec7) where other 3 quarters are there has been a old gas well that I receive about 100bucks a year on… My question is it possible to re-lease these minerals for oil production and new development??? Or what are my options???

Thanks for help!!!

2

Also just talked with current lessor and operators who informed me that this well has been shut in for 2 years plus if that makes any difference???

3

Robert,

If you are getting royalties on the minerals in Sec 7, those minerals are probably HBP. You would need to find the lease(s) (which has your lands in the legal description) which are being held by production in Section 7 and look at the legal descriptions on those leases. Any descriptions on those leases would be HBP regardless of their location. Unless there is a pugh clause on those leases, there is nothing you can do. A pugh clause would allow you to lease the minerals that are not included in a producing unit once the primary term has passed. If the well is shut in, the lease that is being held will have the provisions of the shut in clause. I doubt there is anything you can do with the minerals in Section 7.

4

That's correct. You need to conduct a lease review and check for a possible pugh clause concerning depth restrictions/limitations, as well as possible shut-in royalty requirements/limitations that may be in the lease or any addendum/exhibit or Amendment thereto-the current opertor may only be able to hold the lease for a limited timeframe wiht such payments. Additionally, top-leasing is also an option. Contact me if you have more specific questions and I can try and assist you, just send me a message. I am an attorney in OK located in OKC who specializes in these types of matters such as lease reviews. Thanks, good luck.