Don’t Judge the Significance of the Matter by the Size of the Type

Does your Oil, Gas & Mineral Lease expire at the end of the primary term if a well has not been drilled?

Don’t let the size of the type convey its effect.

The expiration of an Oil, Gas & Mineral Lease is not the primary term, if: (a) a well is producing; (b) a well is drilling; or (c) continuous surface operations are being conducted in preparation of drilling a well.

It’s the language in small print that most people overlook which says:

“If within ninety (90) days prior to the end of the primary term, Lessee should complete or abandon a well on the lands described above or on land pooled therewith, or if production previously secured should cease from any cause, this lease shall continue in force and effect for ninety (90) days from such completion or abandonment or cessation of production. If at the expiration of the primary term or at the expiration of the ninety (90) day period provided for in the preceding sentence, oil, gas, sulphur, or other mineral is not being produced on said land or on land pooled therewith, but Lessee is then engaged in operations for drilling, completion, or reworking thereon, or operations to achieve or restore production, or if production previously secured should cease from any cause after the expiration of the primary term, this lease shall remain in force so long thereafter as Lessee either (a) is engaged in operations for drilling, completion, or reworking, or operations to achieve to restore production, with no cessation between operations or between such cessation of production and additional operations of more than ninety (90) consecutive days; or (b) is producing oil, gas, sulphur, or other mineral from said land hereunder or from land pooled therewith.”

This shouldn’t be confused with interrupting a mineral servitude because to interrupt a mineral servitude, the drillbit has to penetrate the land. Two quite separate issues but closely connected….