I am currently being paid royalties by company XYZ OPERATING for a Texas well in call it Section 1. (My mineral deed covers the entire Section 1). I have now received a lease offer from XYZ ENERGY to lease all of Section 1 (no depth limits mentioned in lease offer). (XYZ is same company: one entity is “Operating” and other entity is “Energy”). Why would XYZ ENERGY now want to lease what OPERATING has been paying me royalties on? Could “Operating” have been the operator for a different (previous) lease owner? If yes, why wouldn’t “Energy” just buy the lease from previous lease owner vs. wanting a new lease from me? What questions should I be asking XYZ ENERGY?
Ask them what you just mentioned above. Ask them if the original lease had a depth or vertical Pugh clause that released mineral acreage that is now open. As them exactly what they are trying to lease and at what depth.
And get a good attorney to review any new lease as the draft will not be in your favor.