Possible Issue found with Affidavit of Non Production on record

I recently acquired a property that had a gas lease signed in 1980 with a primary term of 1.5 years with the option to pay delay rentals of 12 months each. There was never a well drilled on the property. A previous owner(not the original owner that leased it in 1980) filed an Affidavit of Non Production a few years ago stating no evidence of an existing gas or oil well or exploration, and the oil and gas leases have not been operational to the best of our knowledge. It also states that no delay rentals or other payments were made that might extend the term of the lease past the primary term stated in the gas lease.

The problem is that I just found via an online search that there was one delay rental paid in 1981. I have not been able to make it to the courthouse to pull the paperwork of this extension but figure it was an extension of 12 months per the original lease.   It looks like the previous owner didn't know about a delay rental being paid when he filed the Affidavit.  No well was ever drilled though, so the original lease should no longer be valid, but I am a little worried about the Affidavit of Non Production stating a delay rental was not paid, but one was in fact paid. I will probably run this by my attorney, but anyone know if this discrepancy would be a problem for me if I want to lease the minerals to a Gas Co. and if so, how to correct it?

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0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on September 2, 2012 at 3:56pm

File another Affidavit of Non Production and ask the original lessee to file a release of the lease.  If there's no production and no payment then you're free.  You might have to do some leg work, but the law is pretty clear on this issue.

Permalink Reply by Easy Money on September 2, 2012 at 4:17pm

There was no production and there are no current payments whatsoever so the original gas lease has expired/terminated. Maybe I am just sweating the details. I can file another affidavit of Non Production if necessary but I do not believe the original lessee is still in business so I can't obtain a release.  

Permalink Reply by Gunner Ostergard on September 4, 2012 at 2:37am

Marcus,

A landowner does not file a release of lease,  that is something you request from the gas company.  Is that right or do you know something that I don't know?

Permalink Reply by Easy Money on September 4, 2012 at 7:16am

The original Lessee is the Gas Company....

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on September 4, 2012 at 3:16pm

Correct.

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