Section 21 6 S 2 W in Love County is currently leased and is due to expire on March 17 2025. The lease was originally held by Holland Services who subsequently filed for bankruptcy and assigned the lease to Blue Devil Exploration. Are there any time line requirements for a mineral lease holder to notify a mineral owner of intention to re-lease or terminate the lease? Or do I assume that the mineral rights are available for lease at the end of the current lease term.
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This is a very short description of how a lease works without getting into the exceptions etc… I realize that this misses lots of potential issues.
A lease has a primary term (typically 3 years) which provides the lessee an opportunity to begin drilling. If there is no drilling the lease expires. However, if drilling begins and there is subsequent production (or capable of production) the lease is held by the habendum clause for as long production continues. Unless the lease has an option to extend the primary term, there is no requirement for the lessee to notify the lessor. A new company seeking to lease would review the previous leases and would not likely make an offer. That being said, it a good idea to not warrant title in a new lease.
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