They keep paying but didn’t renew?

So the first few years I had a new lease the company made leases with me for two years. They paid an upfront amount, then a month to month amount based on production. I was fine with this. A new company took over the production about six years ago. They never presented me with any contracts since then, but have continued to drill underground and reap the harvests. Is this legal? Do I have a legal ground to stand on to tell them they need to present me with a contract? Thank you

If you post what state and county and a location it will help us answer better. In general, if the first lease ends up in a productive well(s) during the primary term (often the first 3-5 years), the lease moves into the secondary term and will stay in force until the production ceases. We have some leases that are 100 years old due to continuous production. If they continue to pay you, then all is well. If you are talking about a new division order, then sometimes a new operator will send out a new one, but some operators just continue under the original one.

Oil and gas leases should not be confused with residential land leases. There are two terms. The first is the primary term which provides them with the opportunity to begin drilling (which generally includes preparing a site to drill). If they drill and begin producing, then the lease is held by production meaning that as long as oil and/or gas is produced then the lease is valid. The lease is not “month to month” but as long as minerals are in paying quantities. Some owners only receive one check a year. So in short, you probably do not have grounds to demand a new agreement. Some leases are decades old because they are held by production. Expect to pay $275 or more per hour to have an attorney review your lease.

This post is not legal, investment or tax advice, it is for discussion purposes only. Reading or responding to this post does not create an attorney-client relationship.

My lease is in Travis County, Texas. I don’t know how to edit my original post to add that, or even if I can.

Thank you for the information.

Standard lease forms allow them to be assigned without the lessor’s consent. The new operator has to abide by the terms of the lease just like the original operator.

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