We have a lease made in 1923- the oil company sends us a check for .90 every month
There is alot of unproduced oil on the property but the oil company holds on to the lease by claiming production. Is there any way to break or call invalid a lease where no real attempt has been made to produce? and an old old lease?
Joy:
In California most leases require production "in paying quantities" in order for them to be maintain by production. I presume that Texas has something similar. Unfortunately, if your interest is very small and the producing unit is large, it is possible that the field or unit is producing in paying quantities.
Joy,
The operator has the obligation to prudently develope the leased land. Friend me and shoot me a copy of your lease if you have one. Cases like yours have been won in court forcing the operator to release all or part of the original lease.
Joan
If you get these back I have a way of producing them at no cost to you. But I want 70 percent of the oil. If you are interested let me know.
Tom Brooks
Texas does have a paying quantities doctrine, but you have to look at the lease language also.
When I was in Pennsylvania, I ran HBP title on a lease that was executed about the year 1889, and was still producing a barrel or two of oil a day in 2011! Some of these operators are very smart and are buying these very old oil leases, which were executed long before horizontal drilling showed up, and then, if the lease wording allows, and they always did, just drilling horizontally for natural gas on the same leases. No bonus. No field landman. More profitable gas. No state severance tax. Pretty smart. Of course, the title attorneys still make money.
Pete, Thank you. There may be some wiggle room since the lease was written before horizontal drilling!