Family signed an oil and gas lease with Company A. Company A did not develop property and sold lease to Company B. Company B drilled marginal well that hasn't produced for several months and original term of lease expired. Company A wants to "take" over the lease and wants family to sign new lease. Company B still has an open well head and is operator on record. Since lease expired, why must Company A sign family and preform some legal maneuvers to take over the lease? Since lease has expired and there has been no production in the allotted time, doesn't Company B have to provided written notice that they are releasing the acreage?
Have you sent the current operator a notice of lease expiration? If so, what was their reply?
No, Company A asked that family not contact Company B.
Sounds like a mess. It sounds like Company B believes they are still operating the lease, even though the terms of your lease may consider the lease expired due to lack of economic production / activity that is required to keep the lease. Company A wants to take over and wants you to sign a lease them, and it would be convenient for them to tell you not to alert Company B to their actions. Given the circumstances it sounds like you need to verify that the lease you have is truly and legally expired / terminated before signing with Company A. I can understand that Company A wants to do something with the lease that Company B has failed, but to limit problems going forward I don't think I would be in hurry to sign with Company A until things are certain and clear about the lease being expired.
Other than sending the operatior a notice of lease expiration, what actions can the family take to determine if the lease legally expired? By the terms of the lease, it does appear that the lease expired. The TRRC indicates no production for over 90 days and in addition, no reports have been filed for 3 months. Why could company B sign one royalty interest owner and continue the lease and company A must sign all interest owners?
After all this time, Company A finally bought the lease from Company B which filed bankruptcy. Bill of Sale says Company B relinquishes, and surrenders all of Grantor's rights, title, and interest in that lease and the lands to the present owners of the mineral estate and executive rights in the lands and Company B recognizes the lease and grantor's rights under the lease have terminated by operation of the terms of the lease. My extended family owns 75% of the mineral interest and assorted individuals not know to my family own the other 25%. Company A says they have leased all the other 25% mineral interest owners and want to sign my family's interest now. When Company A was asked if they could operate the well without my family signing, they said no. With oil prices down, it's great someone wants it. They are unwilling to negociate terms and when asked what would happen if my family didn't sign, they said they would do what they have to do. It was a veiled threat. We don't know if any heir has executive rights. No one must have them or company A wouldn't be pursuing us so hard? My question is can Company A set my family's 75% mineral interest aside if we don't sign a lease and still produce the well. There is a well and it produced for many years. Company B, the bankrupt company, stopped producing because of their financial problems. In the state of Texas,what percentage of mineral interest owners must a company sign a lease with in order to operate the well?