Pretty sure I know the answer, but I have been wrong before. My mother gift deeded me some property along with mineral rights. She already had the property leased out and the lease includes the option for the lessor to renew the lease. Since property has changed owners am I still bound to the renew even though the original lease is ending? I am pretty sure it is a Yes?
You are correct. The property, even though it has changed hands, is subject to the lease and therefore the option.
Vernon: I would suggest you get a copy of the mineral lease and read the provision pertaining to the option to extend. I believe this is what you are referring to. The option to extend a mineral lease will be at the option of the Lessee (Oil Company). A bonus payment for the option should have been negotiated and be in the lease document also. If the Company wishes to extend the lease and pays the option bonus, then the mineral lease will be extended for the term of the option period. Otherwise, they could also choose not to extend and let the lease expire at the end of the primary term. The Company should pay the option bonus prior to the primary term expiring. I am assuming that the gift deed included both surface and minerals and was filed in the County in which the property is located. I would want to be sure that the Land Department of the Company is aware of the transfer of the mineral ownership interest. I do not believe this transfer will have any effect on the original terms and provisions of the mineral lease.
Vernon:
As Mr. Igau stated above, make sure the transaction was properly filed in the County where the minerals are located, as this is one of the most important actions you will make.