My family has 1/2 mineral interests that are due to expire in 2013 as laid out in a land deed. If a company would want to least the our mineral rights for a period beyond the expiration date, I assume they could not, but would need to least the rights from the future owner as well. How would someone handle such a transaction?
Are you saying that your family has mineral rights that will expire in 2013 and if a company wants to lease after the expiration date, then could you lease the minerals again. If that is the question, if a well was not drilled during the current lease period, then when the lease expires, a new lease can be negotiated with the same or different company. Further, another company could top lease the minerals prior to the expiration date and that lease would go into effect at the expiration date.
J Such -
Where is the land and what is the specific wording regarding the expiring mineral ownership?
Can you scan in and either attach here or send me a copy of the document?
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
713-408-2850 Cell
The land is in Texas. I don’t have the document in from of me, but just notes. The wording is essentially: reserved for grantor an undivided 1/2 interest in oil, gas, and other minerals… together with the right of ingress and egress at all times… for a period of 20 years. This period will expire in 2013.
Charles Emery Tooke III said:
J Such -
Where is the land and what is the specific wording regarding the expiring mineral ownership?
Can you scan in and either attach here or send me a copy of the document?
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
713-408-2850 Cell
I was curious if it contained language to the effect of "...until such production ceased", but I re-read your question a little more closely and realized I was on a slightly different track than you were.
I am not an attorney, so you will probably need to clarify this with one, but it would stand to reason that while ownership of the minerals is still vested in you, you can lease it for the next 100 years if you want to.
The future owner might be a little put out that they won't be able to negotiate their own lease as soon as they might want to, but if you sell a piece of property that is subject to a lease, the subject mineral interests continue to be subject to the lease.
Should work the same for an expiring reservation, don't you think?
Whoever leases the land would be wise, however, to obtain a Ratification from the future owner of it, whether at the time of leasing or at the expiration of the reservation, as well as a Change of Depository and a new Division Order once the reservation has expired.
Charles
Here's one back at you: If the lease directs royalty payments to be made to you, would that provision continue to be effective after the expiration of the reservation? I bet about now you wish that were true, but I would have to go with a "probably not" on that one.
J Such said:
The land is in Texas. I don't have the document in from of me, but just notes. The wording is essentially: reserved for grantor an undivided 1/2 interest in oil, gas, and other minerals... together with the right of ingress and egress at all times.... for a period of 20 years. This period will expire in 2013.
Charles Emery Tooke III said:J Such -
Where is the land and what is the specific wording regarding the expiring mineral ownership?
Can you scan in and either attach here or send me a copy of the document?
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
713-408-2850 Cell
Yes, it does say “or as long as commercial production continues”. Thanks for the other comments.
Charles Emery Tooke III said:
I was curious if it contained language to the effect of "...until such production ceased", but I re-read your question a little more closely and realized I was on a slightly different track than you were.
I am not an attorney, so you will probably need to clarify this with one, but it would stand to reason that while ownership of the minerals is still vested in you, you can lease it for the next 100 years if you want to.
The future owner might be a little put out that they won't be able to negotiate their own lease as soon as they might want to, but if you sell a piece of property that is subject to a lease, the subject mineral interests continue to be subject to the lease.
Should work the same for an expiring reservation, don't you think?
Whoever leases the land would be wise, however, to obtain a Ratification from the future owner of it, whether at the time of leasing or at the expiration of the reservation, as well as a Change of Depository and a new Division Order once the reservation has expired.
Charles
Here's one back at you: If the lease directs royalty payments to be made to you, would that provision continue to be effective after the expiration of the reservation? I bet about now you wish that were true, but I would have to go with a "probably not" on that one.
J Such said:The land is in Texas. I don't have the document in from of me, but just notes. The wording is essentially: reserved for grantor an undivided 1/2 interest in oil, gas, and other minerals... together with the right of ingress and egress at all times.... for a period of 20 years. This period will expire in 2013.
Charles Emery Tooke III said:J Such -
Where is the land and what is the specific wording regarding the expiring mineral ownership?
Can you scan in and either attach here or send me a copy of the document?
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
713-408-2850 Cell
Then you need to try like the devil to get the land drilled before the reservation expires. Send me the legal description and I'll look up what's happening in the area. Use my direct email if you prefer -
Charles
713-408-2850 Cell
REGARDING A TOP LEASE, I HAVE QUESTIONS:
Company A has a lease that expires 2014 or so long as there is production on 1/4th interest. Company B wishes to lease the other 3/4ths interest (which is not under any lease) and take a top lease on the 1/4th leased to Company A. How does this work? What benefit is there for Lessor of the 1/4th interest? Any drawbacks? Is the top lease governed by A's lease or does the mineral owner execute a different lease with B?
Laura:
Did you mean to say "so long as there is production" in your reply?
Laura Reagan said:
REGARDING A TOP LEASE, I HAVE QUESTIONS:
Company A has a lease that expires 2014 or so long as there is production on 1/4th interest. Company B wishes to lease the other 3/4ths interest (which is not under any lease) and take a top lease on the 1/4th leased to Company A. How does this work? What benefit is there for Lessor of the 1/4th interest? Any drawbacks? Is the top lease governed by A's lease or does the mineral owner execute a different lease with B?
¥
Laura, the “top-lease” prevents the present lessee or their assigns from extending the present lease, thereby putting pressure on them to enter into an agreement with the company taking the new lease on the remaining interests. If they do not enter into an agreement with the lessee of the 3/4 interest, upon expiration of the lease existing on the 1/4 interest, the “top-lessee” will have a full interest leased.
Laura Reagan said:
REGARDING A TOP LEASE, I HAVE QUESTIONS:
Company A has a lease that expires 2014 or so long as there is production on 1/4th interest. Company B wishes to lease the other 3/4ths interest (which is not under any lease) and take a top lease on the 1/4th leased to Company A. How does this work? What benefit is there for Lessor of the 1/4th interest? Any drawbacks? Is the top lease governed by A’s lease or does the mineral owner execute a different lease with B?