Thanks Mike.
Mike, we have a couple of leases with BHP that are up for the 2-year option in early August. Block 56, Section 29 and 30. Abstract AB 2292 and AB 2291. How would we go about determining the status?
If a royalty owner has a lease on a well that is producing, what happens to the lease when it expires? Is it customary for the producer to renegotiate it? Can they decide not to renew it even if the well is producing? Do they pay another leasing fee if they renew it for 2-3 years?
Glen, if the company has a producing well, the lease is held by production. As long as this well or any other well that is covered by this lease is producing, they donât have to do anything about the extension. If the well is terminated or plugged and abandoned (which is the more common term), then their lease is null and void and you can do anything you like as far as a new lease.
Looks like a number of BHP leases are up for a 2-year extension (or not). Thanks Mike for the offer to follow up. I would like to try a call first to see what the landman says. I would really appreciate everyone in a similar situation with BHP to keep posting on this site to track what happens in the next two months. This is one of the reasons this website is so valuable!
Glen, this depends on the wording in the lease. If it is stipulated for certain zones, those are the only ones held by the lease. Then you may lease other zones as you see fit.
Mike
Thanks
Garland
Garland,
I canât say for certain, but I would be shocked if the option on your lease was not exercised.
Richard,
It is likely that your option will be exercised as well.
My experience with BHP defies description⌠absolutely the worst communication I have ever witnessed. BHP had acreage leased from us in Sections 11 and 13, Block C-9 PSL Survey. They bought from Petrohawk and right up until the last minute they were exercising their 2-year option, even went to the trouble of staking out a Pad for a drill site, and then dropped the option at the last minute! The 2nd property they were involved with is in Section 68, Block 4 HG&N Survey. Here is another disaster: they renewed the 2-year option with my 2 sisters and 3 months later dropped my 1/3 interest with no word and/or warning, and this piece is still unleased but in all fairness I have not tried to release it to date. There is one for some eager landman to work on! I hope that all of you have better luck with them than I have. But I will close with this word of caution: Stay on top of it and verify everything they say. And even then you will not ever know sure until you have Check In Hand! Best Wishes To All.
Kerry, I was not intending to belittle or demean BHP in any way but only share an experience so it might enable others to be aware of their situation. I helped about 20-25 other individuals get their respective properties leased and in every situation their collective stories about BHP either as bad as mine or much worse. Bottom line is that it turned out to be a blessing in disguise⌠we got all of the acreage leased for between 2 to 3 times as much lease bonus to oil companies that at least pay attention to what they are doing! I wish all the best of luck!
Glen, that is the same response I got until one day I just got in my pickup and drove to Houston⌠didnât really help much but at least they were aware of who I was! Hehehe. Attorney hardly⌠I have always been a self-employed investor and/or broker. In other words, I will continue trading securities until the âToe Tag.â No retirement here!
Wade,
Thank you for the information. I would love if you could recommend somebody that could see my easement agreement.
Mike, thanks, appreciate your observation. They exercised the option on another parcel nearby, so I thought that this one would go as well, but weâll see.
The information about BHP is opposite to our experience. They are renewing our lease two months earlier than is stipulated in the original 3 year lease. Not sure how to interpret this given some of the experiences I am reading here. We are in Block 4 Section 82 AB-5662.
Mr. Hudson, are you an attorney?
Thanks to all. I may have to make a personal trip to Midland to find someone who will talk to me.
If they are as bad at communicating as I understand most companies are, how did you get them to even answer the phone or respond to emails? I understand this is customary in the petroleum industry but I canât figure out why. There has been nothing, nada, nil coming out of the company that has my lease.
Thanks all for sharing your BHP experience. It is again helpful to do so as we have had to keep on top of all or any communications with them.
The most communication I have had has been through the landman. BHP has a customer service web link and phone and that is how I got connected to the landman. In 3 years we have had 2 landmen as they are just contracted folks so they seem to change.
My lease says that the production company has 60 days plus 5 from the end of the month of production to make the royalty payment. June 5th will be 65 days since I got my last royalty check. I would like to hear from somebody who has been through this to tell me how they handled it. Thanks in advance.