Hello,
I currently have property held by a five year lease in Wetzel Co. Wv. The lease on the property will be up soon. There is a one year renewal period, but the primary lease term will be up in July. Is there anything I need to do when the primary lease runs up? Also another question, the one year option to renew, isnt that like saying its a six year lease? I have heard of people having to send the oil and gas company a letter to release the lease. thanks in advance--
I might add that I'm trying to set myself up for renegotiating, not getting the lease renewed. I wasnt sure about using legal documents to prove that there was not any forward progression towards a well. I would like the lease to run out very quietly on its own if possible.
No, it's like saying that it is a five year lease with an option by lessee to extend the primary term of the lease for an additional year. They may not exercise the option. If it is exercised, it must be done so in accordance with the terms of the option paragraph in the lease. If the option is not exercised, you can request a release. However, that would not necessarily preclude another company from approaching you about another lease if they were interested. Often, when doing a Title Opinion, in the curative phase of a project, the attorney will note that there have been several leases taken over the years in the chain of title. It may be impractical to obtain releases at that point for different reasons. An affidavit might then be obtained indicating non-production, leases expiring of their own terms, etc...
Brandon, do you mean there is an option to renew for one year, or that the company has one year after expiration of the primary term to decide if they want want to extend the lease by another 5 years? The latter was common in Mt a couple years ago and would tie you up as effectively as having a 6 year lease. In other words, you are paid for 5 years and tied up for 6.
Mr. Poster,
Your question is very clear. You state that the primary term of lease is up in July and that co, has in lease an option to renew for another year. You made that clear as glass. The reply regarding extending by another 5 years is a reach, and it's obvious that is not what you meant to convey.
Another alternative that you have would be to file the affidavit yourself stating that the option was not exercised by lessee. (if they don't execute for you a timely release)
It is also possible that if another company is interested, that they may call you and ask you if it was it extended. They may first look in the public records to see if they can locate some type of written notice of an amendment or extension of your lease. If you tell them no, they may lease you. They can get an affidavit at that time, or maybe get one later. Different lessees don't always operate the same.
"There is a one year renewal period..." I notice that you didn't write, "There is a one year renewal period to decide whether they want to renew or exercise option for an additional five years."
I believe Brandon could answer for himself. "A one year renewal period" is not crystal clear.
I believe that he got some really good replies.
First I would like to thank you for the quick replies to my question. I think with both of you having alot more experience with title examination, ... legal stuff, etc. that wording is of upmost importance. It seems that one could have taken that question both ways when one takes into consideration his own: professional experience, known history of leasing, context. After the five year primary, the company has the right to decide whether they want it again up to one year . If within the one year decision period they decide they want it, they can prorate it for 2 years or take it again for 5.
Brandon, I wasn't trying to score points off anyone, just trying to get a sense of what you have to deal with. Also what I said about being tied up for 6 years but paid for five is also correct, but you already knew that. I'm sure you will try not to let that happen again. I hope things work out the way you want with the lease expiration.
I told you that you received some good replies. Hindsight is 20/20. I understand that many or most of the questions are by people who are not in the business. I think based on your attempted clarification and the oddity of the 2 years or 5 years "proration", you might be better off posting the exact wording of the clause, or taking it to an attorney. As it still stands, no one here can really say that they lit up any scoreboards with points, simply because no one really has seen the exact wording of the clause. I do find it interesting though that you omitted so much information in your original question.
Brandon mason said:
First I would like to thank you for the quick replies to my question. I think with both of you having alot more experience with title examination, ... legal stuff, etc. that wording is of upmost importance. It seems that one could have taken that question both ways when one takes into consideration his own: professional experience, known history of leasing, context. After the five year primary, the company has the right to decide whether they want it again up to one year . If within the one year decision period they decide they want it, they can prorate it for 2 years or take it again for 5.
Shale Exploration was trying to lease people in Montana a couple years ago with such leases. One year after lease expiration to decide if they wanted to extend or not.
I don't know what his lease says. I haven't read it. I gave him some good replies based on the information he provided originally. That is one of the problems of this site. Most of the people aren't in the business, and therefore don't know how to properly phrase their questions, or what information to include. Sometimes it just has to get flushed out. If it makes you feel good that you feel that you did that, I'm glad.
Dave, first you say it's clear as glass then you say it's unclear. This was not about you, you are making it about you. Nobody has seen every lease out there. If you persist, you will be arguing with yourself. I said I did not post to score points off anyone and I meant it. Only in your mind was there an attempt to prove you wrong and it would not make me feel good to do so. It sounds like someone is projecting their personality on to others. It sounds like this was a small learning opportunity for you. I posted that Shale Exploration was using such a lease 2 years ago in Montana, just that, so anyone who wanted could do some research, a completely neutral post.. Dave, nobody is doing anything to you, you are doing it to yourself. And no, that doesn't make me happy either.
Dave Quincy said:
Mr. Poster,
Your question is very clear. You state that the primary term of lease is up in July and that co, has in lease an option to renew for another year. You made that clear as glass. The reply regarding extending by another 5 years is a reach, and it's obvious that is not what you meant to convey.
Another alternative that you have would be to file the affidavit yourself stating that the option was not exercised by lessee. (if they don't execute for you a timely release)
It is also possible that if another company is interested, that they may call you and ask you if it was it extended. They may first look in the public records to see if they can locate some type of written notice of an amendment or extension of your lease. If you tell them no, they may lease you. They can get an affidavit at that time, or maybe get one later. Different lessees don't always operate the same.
"There is a one year renewal period..." I notice that you didn't write, "There is a one year renewal period to decide whether they want to renew or exercise option for an additional five years."
You haven't proven anyone wrong because there is no proof. It was clear in ordinary use of the language.
Whatever.
I think you missed my original point. I know it wasn't about me, just as it wasn't about you about a year ago now. It was the first question that I ever replied to here. My reply was that the poster didn't give enough information for me to answer it. You came on and took a shot at it. You started giving him a lesson on race, race-notice statutes. As it turned out, race and race-notice had nothing to do with his question. As I came back on to point that out, more information got flushed out. Since then, I am more liberal in trying to interpret questions because I know the posters are not in the business for the most part. I try to give advice based on the average or ordinary, not the extraordinary. I realize that it is a process, and also that if the answers are not always on point, someone else reading them may learn something anyway.
Whatever.