I have a tiny amount of mineral rights in Dechesne Co. Utah. I was reviewing my old lease with Ovintiv and found that it is a forever lease!! Is it legal for leases to be indefinite? When my daughter inherits my rights, they said she will inherit the forever lease as well. Does this sound right?
I have reached out to several attorneys online in Utah to ask for help, but no one has responded! I want to transfer my interests to my daughter, but need to find out about this lease stuff first.
Please help!
A referral to an attorney who will respond to me would also be helpful.
That is a normal lease and is not “forever”. The lease typically has a primary term of 3-5 years or something like that. That gives the operator time to drill but does not mandate drilling (unless the lease specifically says so.) If a well is drilled and there is production, then the lease moves into the secondary term which lasts as long as the terms of the lease say. Production is one of the clauses. Wells decline over time and eventually quit so a lease will cease under its own terms. Leases give the right to drill and recover payments for royalties. Somewhat similar to an apartment lease. If you own an apartment, you can lease it someone for a period of time to use it.
Your mineral rights are different and are real property. If you give to your daughter under the terms of your will or trust, then the lease will follow the mineral rights. If production of a well or wells under the lease are ongoing after you pass, then she will get the royalties. BUT, she must inform the operator that she has inherited and they will need a copy of the probated will or trust to prove that she has title. It must also be filed in the county where the minerals are located. If the wells cease to produce before you pass, then the lease is no longer valid, but the mineral rights still stand alone per your directions.
