Lease termination

Good evening,

I have a Texas oil lease dated April 1980. It has a well that was drilled in 1984 and has been producing. In November of 2022 is was sold and the new operators were slow in reorting to the TRRC and showed reduced production. It showed no production in March and April 2023. Then half normal production in May and no production for June, July, August and September. That was a total of 4 months with no production. Then in October a small amount. Then it was sold again and the new owner has not reported for November 2023. My question is was the lease terminated by no production for 4 months?

The lease has the wording attched as follows:

Maybe. Multiple factors. First, you cannot look at only a couple of lease provisions in isolation. All the provisions must be reviewed as there may be other language which affects lease termination. Second, is there a unit agreement and what are its provisions? It is not uncommon for a unit agreement to effectively amend the lease. Did the lease grant power to pool or did the lessor consent to the unit? Has the unit expired? Third, during the period of no production, were there operations such as a workover or repairs? Most often these activities will keep the lease in effect. You need to gather all the relevant information, including the lease, any amendments, unit agreement, production reports, and have this reviewed by an oil and gas attorney who can then advise you.


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