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oil lease question

N

notjustair

Well-known Member
Try to make this short. Closing on the farm the 3rd of June. Realtor just called regarding a lease for gas/oil. Apparently there was a $50/year lease signed in '83 with the owners when it was a dairy. They aged and it sold to current owners. There has never been a drill or well and the owners have never gotten any of this $50 per year (in the last 14 years). They believed that this meant the lease was null. Realtor says the originating family may still be getting the $$, thus keeping the lease open. Apparently these don't necessarily following the land ownership chain?

Anyone know the state of KS regulations? The realtor says we will iron it out this week. I'm just wondering what the chances are of this lease existing without anyone knowing. With the price of things these days you just never know. Surrounding farm ground is full of producing wells. I'd rather not have a surprise in 5 years of someone wanting to drill and having rights.
 
Have your realtor gather all the papers, make a set for you, and go see your lawyer. Do not just get advise on a tractor forum on this matter. Tom
 
In Kansas, I think all oil/gas leases have to be recorded at the county register of deeds office in the county where the property is located. It is public record.
 
Just wait till the coal miners show up and start digging, and you are not even getting the money. You want the mineral rights.
 
Tom hit the nail on the head, if you already don't have a lawyer for this deal, get one yesterday, with all this fracking bs, I would think twice before you take another step. The lease is one thing, but to have poisoned water without even the lease to ease the pain.... wow. I hate to say it, cold feet about issues like this keep me in the frozen over crowded left wing northeast.... I own 'everything, in it, on it, below it and above it'. this was written before airplanes so the lawyer said. But it is the under it that haunts me the most out there. BTW, real estate people get paid after the deal is done, so sugar coating reality is to be expected, he told you straight up, that's good. But get a lawyer on it right now.
 
notjustair, Get a good Oil & Gas Lawyer to look at it.
But in my Opinion it is a option lease, The oil company was just tying up that parcel with many others back in 83 to keep some other company from getting the lease later! They paid the first year and didn't reup the following yrs for No more money changed hands. Any way most leasees stipulate a length of time and drilling has to start before the end of the contract or it is Nill and Void or more money needs to change hands again.
2 yrs ago we leases to have ours place seismographed. They had 3 yrs to complete the work and it was over. Made a hansom amount for them to drive the train of 3 trucks all over our place and do the shake and thump thin they do.
Hope this helps.
Later,
John A.
 
I would be very surprised if the lease signed in '83 is still in effect, but it certainly could have been extended. Five years is the life of a typical lease. It would also be unusual for property to not be under lease when it's surrounded by operating wells, but that's not necessarily surprising either.

Are you sure you're buying the mineral rights?

If you know someone in the oil exploration business, ask them for the name of a local "land man". These are the people who research titles for the oil companies and they have a lot knowledge about local laws and idiosyncrasies. My sister does this work (although not in Kansas), and she says you can't believe the things you find when running titles: Royalties going to the wrong person, leases where the lessor doesn't actually own mineral rights, mineral rights that over the years through inheritance have been split to tiny fractions and half the heirs can't be found.
 
First get a lawyer then go to the county register of deeds and get every bit of information you can get on the property. If the oil/gas rights have not been active for a certain (20 yrs here)number of years then you can go thru court and get them--maybe. The leases do not go with the land unless specified at time property is sold.
 
I can't speak to the law in your state but in PA my recorded deed clearly states that I do not have COAL rights and if the owner of the coal rights wants to extract the coal, damage to the land and building could occur.

I have a gas lease which is about to end because the company that holds the lease said there is not enough gas in commercial quanties. At any rate the lease is recorded on my deed at the courthouse so I would think it would be easy to find out about the property you are about to close on.

Good Luck!
 
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