Lease renewal (extension)

Can an owner extend his lease on Section ABC to Oil Company XYZ - accept the "bonus payment" -then sell his rights to Section ABC to a 3rd party one month later?

Jenell, you [or anyone] can sell your mineral rights burdened by the lease. Time doesn't really matter. As a practical matter I would want the lease bonus payment in the bank before the sale went through to keep things simple.

If my acres were not yet leased, I would try to sell them unleased as they could be more valuable that way because a sophisticated buyer might be able to negotiate a better lease than I could, among other options.


From an economic value standpoint, your property in Ward should be held until it is drilled and producing. At that point it will be much more valuable to a buyer. However, if you are compelled to sell before production is established, pay particular attention to the language in the mineral deed as pertains to warranty of title and the Effective date of the transfer. If they don't track with the lease commitments recently made, difficulties in closing at a predetermined price will most likely arise.

Gary L Hutchinso

Also, check your lease. Are some Producer 88 leases out there that give the lessee a right of first refusal if you want to sell your minerals.