Held by production?

I have a question that seems to get many different answers depending on who you ask.

What is it that actually holds a lease by production? Is it a lease with both a primary and secondary term also called a habendum clause that contains both a primary and secondary term for as long as oil and gas is being produced? Or is it the actual production that occurs during the primary term of the lease and it doesn't matter after that as long as they produce it is held?

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Permalink Reply by Pondage on January 1, 2016 at 5:45am

 Barry D,

Happy New Year.

Yes, I can see how that is a problem. I'm sure you already no this but the reason that a large portion of old leases just covered the oil or when both oil and gas where in the old leases terms the lease favored the oil recovery. A point in time related situation.

Back in the day oil was king and gas was considered an unwanted byproduct of recovering the oil. 

My how times have changed.    

Permalink Reply by Barry D on January 1, 2016 at 7:46am

Yes, I am aware.

And, yes how the times have changed.

Permalink Reply by karen brown on January 7, 2016 at 5:25pm

held by production can mean a lot of things and I has tobe written in the lease what describes HBP.  If a standard lease was signed theycan say HBP means if they would survey, clear land or doze a road.  I have a lease and it specifies that they must drop a bit to the ground  for HBP.  I would have an attorney look at your lease 

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