Oil and Gas Lease Expiration Claims

Summary

This practice note discusses how in-house counsel should approach oil and gas lease expiration claims. Counsel are provided with five detailed steps for understanding why landowners are terminating the lease, whether the lease matters, what the claims with outside counsel might be, developing an efficient plan, and how to learn about drafting future leases from the one at hand. For the purposes of this practice note, we have used case law (etc.) from the state of Texas. The practitioner should understand that while the overall principles here may still apply, the statutory and case law may vary from state to state, and thus due diligence in this area will be required for leases of lands outside of Texas. The typical oil and gas lease has a habendum clause with a fixed primary term that the lessee/operator must comply with certain requirements and a secondary term that lasts for so long thereafter as oil or gas operations or production take place on the leased premises or lands pooled ...