What happens when companies drill at the end of your lease


#1

My question is two-fold:

  1. If a company drills at the end of a lease and continue s to use the land after the lease expires im assumng they have to compensate the mineral owner with another bonus of some kind. Is that correct?

  2. If so, is the bonus the new market value or the original bouns signed years before?

Thanks for any help,


#2

When you read your lease, it will state that the primary term is 3 or 5 or X years. However if production is established, then the lease will stay in effect for as long as there is production from your tract or pooled minerals. There are leases over 100 years old because of new wells being drilled before production ceases from existing wells. It is very different from an apartment or office lease which expires absolutely unless the parties agree to a new lease. Good luck with your new well.


#3

The only time you will get the extension bonus is if they did not drill in the allotted times of the original lease. They can drill on the day before your lease is about to expire and that lease will stay active as long as they are producing.