(Columbia County, Arkansas, but a general question)
Last year I bought 27.66 acres of minerals from a friend. When I bought them, almost 5 acres were being leased by an oil/gas company. The lease was for 3 years with a 2-year option. The primary term (3 years) expired last Friday and I haven’t received any indication that the company wanted to exercise the 2-year option. No drilling has occurred.
I would like to confirm, through email, that the lease has expired and that the company hasn’t made an effort to exercise the 2-year option. Is it best to email the company itself or the landman who facilitated the lease? Is there anything you’d recommend asking specifically in this situation?
Is it worth using a certified letter to eliminate the possibility of some sort of back-dated option exercise in the future?
I ask because the lease wasn’t negotiated (first draft was signed) and after finding this blessing of a website, the hope has been to have an opportunity to negotiate a better lease someday.
If you deem it important you should send your inquiry via certified mail. Did you notify the lessee or their assigns, if any, of the change in ownership? The previous owner may have received the extension money.
Thank you for responding, Todd. I forgot to include that a year ago I provided the new (my) deed to the oil co’s receptionist who responded that there was nothing further for me to do in order for them to know that the property had changed ownership in case they ended up producing.
Try sending a certified letter, return receipt requested, asking the lessee to mail you a signed release that you can get recorded in the County deed records.
I generally send a certified letter with a prepared “release” enclosed, to record at the county clerks office. I’ve also filed affidavit of non-payment (shut-in, extension), when no response or refusal to sign.
Oh, this sounds like a great idea. I decided to email the receptionist this morning since she was so friendly in the past. I’ll definitely send a certified letter with prepared lease if it isn’t resolved informally. When it comes to sending a prepared release, is that something that I’d need to have drafted by an attorney? Or might there be such a template available somewhere?
Thank you for sharing this Oklahoma release example, Martha.
Update: The oil company’s secretary emailed back today. She sent a notarized “Release of Oil and Gas Lease.” She also said that they could mail a copy if I prefer (I do).
To be sure, I’d like to ask the forums’ thoughts about the release that she sent. I’ll use a simplistic example instead of fumbling through the details:
-Bob owns 28 acres of mineral rights
-Gas Co leases the 28 acres for gas/oil production
-Bob sells all 28 acres of his minerals to Bill
-Bill informs Gas Co of his purchase, but the lease is not updated since no production
-Bill’s lease (in Bob’s name) expires
-Bill asks Gas Co for a lease release
-Gas Co sends a lease release to Bill that explicitly names Bob but not Bill
Since the lease never mentioned Bill, is it sufficient for Gas Co to release Bob from the lease?
Nicholas, you have discovered that many companies are very responsive to emails in these types of matters. Many email systems allow for you to include a read receipt which actually only indicates the email was opened. This does not replace certified mail, but certified mail only indicates that you sent mail on a certain day. It does not certify the contents of that mail. Record that release once it is received in the mail.