Oil Lease not extended but now receiving royalties

I leased my mineral rights 5 years ago. The lease was for 3 yrs with an option to renew for 2 more, in which case I would have been paid more lease money.

I never received any more lease money after the initial 3 years but I have been getting small royalty checks because they are drilling on the land. I called the company that initially leased the land from me and they said they didn’t take the additional 2 yr option. The royalty checks are coming from Continental.

I guess I’m confused. If someone is drilling and I’m getting royalty checks, is my land leased to a drilling company, and if so shouldn’t I have gotten a contract and some lease money?

If you provide the legal description we can most likely get you an answer.

Not knowing more without a location, the likely answer is that your lease was drilled during the first three years and is now in the secondary term of the lease since you are held by production. The royalties are your payoff. There was no need to extend the lease another two years with the option since they drilled within the first time frame. You are leased to whomever you signed the lease with unless they flipped it to someone else.

1 Like

Leases can often contain clauses wherein “operations” can perpetuate a lease into its secondary term. It depends on what the lease defines as operations. H


I don’t think you have any recourse here. If they were late commencing operations, you really need to catch them in the act and have firm clauses concerning what does and doesn’t constitute operations/ drilling. I know this doesn’t help you but it might help someone else.

If you are getting checks now, they might have been a little slow (what isn’t slow these days?) but I would consider them fairly diligent as they were probably pulling product out of the ground 6 months before you got a check.

1 Like

This topic was automatically closed after 90 days. New replies are no longer allowed.