Can terms of expired lease be "held by production" before actual production?

Oklahoma Mineral Rights McClain County, OK
1

I have a small share in McClain County, Section 20 T6N R4W which is about to go into production. A well has been drilled which is being "brought online" for production.

My lease expired March 1, 2014 -- I have been learning about mineral rights leasing and mulling over what to do, since then, until today when I sent out a series of emails to solicit offers. Apparently, too late, according to a response from my prior lessee.

The old 3 year lease had a royalty of 3/16 of no production and maybe a bonus of +/- $1,000.

Can the producer hold me "by production" to the old percentage in a division order or should I go after them to negotiate a new lease?

Sheppard

2

If drilling operations were started prior to your lease expiring, then your lease is held by production. You can't renegotiate a lease, that was done at the time you signed it and those terms will stay in place for as long as the well produces. It sounds as if you are getting a 3/16 royalty. That is a typical royalty amount. The signing bonus is only paid once, and is just for signing the lease.

3

Dean M,

This was a helpful response. Thanks for getting right back to me.

Sheppard