This novice requests some clarification please.
1. Does a lease expire/terminate on its own terms automatically or is it not considered (treated as) expired/terminated until a Release Form from the Lessee is filed?
2. I have never seen a release. Is the Release Form verification from the Lessee as to which acres are released and which acres are not rather than just a statement that the lease has expired/terminated?
Thank you.
I believe that the lease expires on it's own terms, the problem is that others do not know that the lease has expired, at a glance, unless there is a release. I think you can file a statement of no production but that isn't as good for your chain of title as a release.
What can be filed if there is production and Pugh clause requires release but the Lessee does not provide a release?
r w kennedy said:
I believe that the lease expires on it's own terms, the problem is that others do not know that the lease has expired, at a glance, unless there is a release. I think you can file a statement of no production but that isn't as good for your chain of title as a release.
I will go out on a limb and say that it would still be an affidavit of no production but that ir should include the description of the acres not in production and reference the lease itself.
Thank you.
r w kennedy said:
I will go out on a limb and say that it would still be an affidavit of no production but that ir should include the description of the acres not in production and reference the lease itself.
What state? In Texas, it depends on what the lease says, largely, and producers do not customarily sign or file releases.
Mr. Wilson,
Most leases expire on their own terms. However, if a Memorandum of Lease was recorded, if there was any permitting, drilling or preparations to drill performed, if you negotiate another lease before the expiration date, or signed any lease that is vague on these matters, interpretation of the expiration provisions may come into play. Formally requesting a release in recordable form by a date certain or you will consider the lease expired, will go a long way towards clearing up the question for the future. Getting a partial release of acreage is a much tougher battle.
State of Texas. If producers do not customarily sign or file releases then why should I be concerned with getting one? Does getting a release just make it easier for landmen to know that there are no continuing operations on the lease or that it is not held by production?
Wade Caldwell said:
What state? In Texas, it depends on what the lease says, largely, and producers do not customarily sign or file releases.
Yes, it makes it easier for landmen to know your acreage is open. But most landmen can find out if production has ceased, which usually means the lease has terminated. It may be difficult to get a signed release.
When a primary lease expires and there is no activity I call and request a release be recorded. I have had them complain about having to do so but so far all have complied with my request. I have had minerals overlooked as all the companies doing leasing in the area expected the Lessor had exercised their option to extend that was in the lease but they hadn't. More than once the operator did another lease with me when I asked for a release.