I have a MI in section 28 block 57 T2 in Reeves County. I signed the lease in September of 2016. The lessee drilled and completed a well well over three months ago. I receive royalties. I have a 90 day continuous drilling clause in the lease. Is the lease valid until September 2019 or has it expired due to no further drilling and hence, the acreage not committed to the well now available to lease?
Thanks.
Hi Rick,
Without reading the lease it is hard to say for sure, but most leases are structured so that the continuous drilling clause doesn’t begin until the Primary Term has ended. So if you signed a 3 year lease in 2016 then they have until 2019 to wait until the other clause takes effect.
Thanks Travis,
I posted the question because a company has sent a lease offer letter. But yes the lease signed says after the primary term. So they must want to top lease.
Rick,
It depends upon the lease terms (primary term, CDC language, retained acreage, etc.) you signed and the timing and drilling of the wells by the operator. This section looks pretty well developed with several wells in the E/2 and W/2.
This section is Relinquishment Act Lands. Accordingly, the State of Texas owns the minerals and you own a surface interest, and as a fiduciary of the state, lease their minerals and receive one half of the bonus and royalty. Also, you cannot top lease RAL lands. Your best bet would be to give the company a call and get more info.
Mike