Old lease release
Our property has an old Atlas resources lease on it that expired back in '99. Would that have to be marked as released in the courthouse to be able to proceed with establishing a new lease with a different company?
Thanks!
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Replies to This Discussion
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Permalink Reply by Ben Elmore on
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Technically no, but any new lessee may mistakenly believe you are still under the old lease, so it is good to get a release filed. Oftentimes, the new lessee will know that the old lease has terminated given that there is no lease or unit well holding your property, so they will come to you even though no release is on file. Ultiamtely, the new lessee will want a release and will typically either ask you to get it from Atlas or they will get it themselves. Your Atlas lease should contain a provision referencing the filing of a release. Under that provision, you can demand they record one
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As a last resort... assuming you aren't getting paid any royalties by Atlas (or anybody else), file an "Affidavit of Non-Production" which simply provides a statement that you aren't receiving any royalties, shut in payments or any other payment that would serve to have perpetuated the previous Atlas lease.
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We won't buy a lease for our client with an old un-released lease on it until they provide us a filed release from the original operator.
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We have one of the top attorney's in the State of Ohio and he filed what is called a "affidavit of non-compliance," and he said 80-90 percent of the drillers will except this...and the rest you probably dont want to deal with anyway.
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Part of the issue we have been seeing is landowners not properly complying with the procedures set out in the Dormant Mineral Act to get their non producing leases released. If a landowner comes to the table with a properly filed release of a prior lease, I have told my landmen to sign the lease.
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The "affidavit of non-compliance" has nothing to do with the dormant minerals act. It is basically stating that the landowners never had a well or any production...it doesn't have to be 20 years before you can file it...it's a lot cleaner, less expensive, and doesn't involve the original lessee.
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Not true, look up the Revised Code 5301.332. It covers leased mineral interests.
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With all do respect...I'll believe the attorney that I'm paying $350 an hour and who has 30 plus years in oil & gas law in the State of Ohio!
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All I did was quote what the revised code was for the State of Ohio. If your attorney thinks there is a different approach then that is on him.
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Your right you "quoted" the ORC...you didn't interpret it. Great attorneys use different aspects of the law, not just one, and mold them to fit the out come they desire.
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BGJ is right, the Dormant Minerals Act that you posted a link to deals specifically with leases and rights thereto when there was a mineral conveyance. To file an affidavit of non-production on land that you own both the surface and minerals mitigates the need to use such act.
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And I'll add this last tidbit... in order to file under the "dormant minerals act" 20 years need to pass, and it is designed for landowners who are locked into a lease perpetually where the lessee has not performed any drilling activities during said timeframe.
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