Lease extension on producing land after 3-yr primary term is expired

Texas Mineral Rights Winkler County, TX
1

I have inherited a very small mineral interest in private land which is presently in production located near Kermit TX, the Permian Basin.

My question is this...if the leased land is producing after the primary term of the lease (3 years) is there normally any need for the lessor to extend the lease or otherwise renegotiate or compensate the lessee (royalty owner) in order to continue the use of the land for production?

Thanks!!

2

Carolyn, my understanding on this is that as long as there is a viable producing well on the lease, the company that has the producing well can hold the lease without further negotiations with mineral royalty owners. When the well goes 'toes up' , it should be open for releasing. Would be happy to hear other observations on this.

3

Thanks so much for the timely response. This goes a long way toward my understanding of the terms of the lease. And, thankfully, the "toes up" part looks a long ways away!

4

You will need to read the terms of the lease to determine if it is held by production or not....

5

Laura, you make a good point to check the lease contract. Some leases allow for a time of extension with some prementioned extension fee and some leases have allowance for a given number of days after bringing in a producing well during the ending days of a lease contract. Can you think of any other things that might be in a contract that would not open the acres for releasing if there was no producing well? Usually the RRC has rules set for the number of acres a given type well will hold.

6

Thanks, Perry!!!

P.L. Williams said:

Laura, you make a good point to check the lease contract. Some leases allow for a time of extension with some prementioned extension fee and some leases have allowance for a given number of days after bringing in a producing well during the ending days of a lease contract. Can you think of any other things that might be in a contract that would not open the acres for releasing if there was no producing well? Usually the RRC has rules set for the number of acres a given type well will hold.