Release of Oil, Gas, and Mineral Lease Template
(Upstream Oil & Gas)

Summary

This template is a release of oil, gas, and mineral lease and provides a means of releasing a recorded oil and gas lease. The existence of the lease can be cleared from the title to the subject property with this release. This template contains practical guidance and drafting notes. An oil, gas, and mineral lease entitles the grantee to explore for oil and gas on the grantor's property. Each lease is generally for a set term of years, unless oil or gas is found on the property and later produced in paying quantities. Oil and gas leases (or memoranda thereof) are recorded in the real property records of the county or parish where the property is located, much like a property deed. If oil or natural gas is not found and produced on the leased property, the lease will eventually terminate pursuant to its own terms. In such a case, a lessor may provide notice to the lessee that the lease has been terminated for failure of production. However, this does not alert the public that the lease has been terminated. To ensure that the public is aware an oil and gas lease has terminated, and to help avoid later disputes regarding royalties, bonuses, surface interference, or rights to ingress / egress, many states require the lessee under a terminated lease to sign a release that is later filed in the public records. Even where not required by statute or case law, many oil and gas leases require the same of a lessee. A lessee that fails to do so may be required to pay attorneys' fees to the lessor in an action to quiet title to the leased property. A release of oil and gas lease should clearly identify the recorded lease that is being released. After proper execution and notarization, the release should be recorded in the same county office in the state where the underlying lease was recorded. Once the release is recorded, the lessor can confidently approach new lessees about signing a new lease for the property. There is no further stain on the title of the property, and no remaining prospect that two competing leases exist. For more information on the upstream oil and gas leasing process as well as how to negotiate an oil and gas lease, see Upstream Oil & Gas Lease Transactions, Lease Agreement Drafting and Negotiation (Oil & Gas Company), and Oil & Gas Lease Agreement Drafting and Negotiation for the Landowner. For additional information on oil and gas lease expiration, see Oil and Gas Lease Expiration Claims. For additional information on how different states treat oil and gas leases, see Oil and Gas Conservation and Leasing State Law Survey.