I am looking at a lease possibility which says that after the 3 yr. lease ends if there is production they can extend it two more years or as long as it is producing. Is this typical? I would think after the signed lease is expired (three years) that I should be able to re-negotiate at a better rate if it is producing and the oil situation is improved over all.
If it is producing within three years and your minerals are under the spacing, there will be no further compensation as the minerals would be held by production.
I personally never do lease extensions. At the end of the term if they are producing oil then your interests are "held by production". After that you receive royalties based on what % you have negotiated in your lease. I have been pushing for at least 20% if not more. good luck.