Is it true you can only lease your property two times?

Our landman said you can only lease your property two times? I'm wondering if ones lease runs out adn then the grid they are in starts producing gas, are you no longer able to collect rolyalties because both your leases are done?

 

I'm thinking all these properties are being leased and some in their second contract and wells are being built but pipeline might be a ways down the road?? What happens if the 2nd contract runs out?

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Replies to This Discussion

Permalink Reply by Ann Ticopa on December 7, 2010 at 6:44am
Doesn't right of first refusal imply no automatic extension/renewal? That is, the gasco holding the original lease has the right to match the "high bid" from other gascos at renewal time.
Permalink Reply by donna elliott on December 7, 2010 at 7:00am
I have this in my lease, I will need to read it again. The leasing co didn't want it in the lease but I insisted and Ann I believe you are correct, which is why I added it my lease.
Permalink Reply by Michael Karpiak on December 8, 2010 at 2:12pm
if your in a unit and they do not have a structure in that unit.......a lease can expire
Permalink Reply by Lynn Wigglesworth on December 8, 2010 at 3:06pm
What is "a structure"?
Permalink Reply by FXEF on December 12, 2010 at 10:36am

I think Michael means active drilling rig. 

Permalink Reply by paleface on December 7, 2010 at 12:54pm
It means your gas company has the first right to beat an offer you got from another co.
Permalink Reply by Brian V. on December 9, 2010 at 7:13am
You are correct John. The right of first refusal give the company the right to match any competitor offer to lease when/if the lease is due to expire. It's not a bad thing. It can create a bidding war, however if you choose that you no longer want to do business with a certain company it makes that difficult
Permalink Reply by donna elliott on December 12, 2010 at 4:57am

Right of First Refusal

In the event the Lessor, during the primary term of this lease, receives a bona fide offer which Lessor is willing to accept from any party offering to purchase from Lessor a lease covering any or all of the substances covered by this lease and covering all or a portion or the land described herein, with lease becoming effective upon expiration of this lease, Lessor hereby agrees to notify Lessee in writing of said offer immediately, including in the notice the name and address of the offeror, the price offered and all pertinent terms and conditions of the offer. Lessee, for a period of thirty days after Lessor's mailing of the notice shall have the right to match the terms offered. Lessee's acceptance of said offer shall be subject first to the terms and conditions of this lease.

 

This is how it reads in my lease.

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