Lease Renewal Question

Oil and Gas Leasing Help
1

My mother and my aunt signed an oil lease in the fall of 2011, on a piece of property that they owned the mineral rights to 50/50. My aunt signed the documents first in August and my mom signed later in November. My mom passed away in early 2013 and my siblings and I inherited her portion.

This past August, the lease with my aunt expired and she signed a renewal on the lease and was paid for the renewal. During that same month, the oil company pooled our well with another well on the adjacent property. When November came, we were not paid for a lease renewal. There are two wells that are active and producing.

We were told that they only had to renew my aunt's portion in August, in order to pool the wells. Since my mom had delayed in signing her documents back in 2011, and the pooling of the wells was done in August, they did not have to pay us to renew "our" lease that began in November, 2011 and expired in November, 2014. Here is what my sister was told, "It seems that they decided to pool Section XX back in August. And to be able to pool leases they all have to be in effect at the time of filing the Pooling Order. So, we lost out because even thought the Pooling Order had a beginning date of August 20xx, they did not file the paperwork until late September. The filing date was after (my aunt's) lease on Section xx expired so they had to renew hers but not ours."

Basically, we own 50% of the mineral rights, but only my aunt was paid for the renewal.

Is this correct? If not, who should we contact to correct the situation, the land man who put the lease together, his company that we had the lease with, or the company that is paying on the wells?

2

Where are the minerals located?

3

They are in the Texas Panhandle.

4

If the effective date of your mother's lease was in November 2011 and production was established before the end of the primary term, then the lease continues until production ceases. The oil company would not have to obtain an extension or new lease. Look at the lease and see what the specified expiration date is. It could be set out in the beginning or it could be at the end before the signatures.

5

Dear Ms. Franco,

First, you have our sympathy for the loss of your Mother.

IF everything that you have said is accurate, there is no situation to correct. The oil company acted within their rights as granted to them under the lease executed by your mother.

To make sure that you are in line for payment when the well is placed in production, read the lease and do what the lease requires regarding notification in the event of a change of ownership (such as the death of the Lessor).

I hope that the well is a bonafide barnburner and they drill 5 more just like it on your minerals.

As my Dad would say, "Don't complain that you have no bread when you have a ham under each arm."

By the way, I do not know Tennis Daze, but his answers from what I have read are useful, accurate and to the point. He is an asset to this board.

Best,

Buddy Cotten