Hello:
I recently received a request to lease my interest in Sec. 8-22N-10W in Major County. I agreed to the lease, received a check for my interest, and all seemed fine. Ten days after receiving the check, I got a call from lessee that the original deed that conferred my interest was a "term interest deed" that expired if no oil production occurred after the original term of 20 years, that the area being leased did not show production during the time in question, and therefore the deed is no longer valid, and they are asking for their money back.
This was their error, and I had no knowledge at the time I signed the lease that the deed was a "term interest deed." I did find the original deed (from 1948) in my records and it is a 20-year term deed, but it also includes a provision that the deed remains valid as long as oil production occurs after the initial 20 year term.
Additionally, according to a 1984 court case (Fox vs. Feltz) a stipulation was added that if a term-interest deed is in its secondary term (after the initial 20 years has passed) production need not be on the land conveyed by the term deed, but can be from a drilling and spacing unit encompassing the described land in the deed.
Does anyone know how I could determine if production has occurred on or around Sec. 8-22N-10W in the years since 1968? (the end of the 20-year term). I don't want to take the landman's word that my deed is in fact null and void before researching the issue myself.
And, if a corporation sends a lessor a check, then that corporation subsequently finds they made an error and wants their money for a lease back, is the lessor obligated to pay that money back? Does anyone know where to find a precedent legal case for this, or is it a question for a lawyer?
Thanks in advance for your help!
Angela