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landownerPermalink Reply by drilltheshale on December 28, 2009 at 9:11

Oh, by lease holder, I mean landowner/lessor.

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landownerPermalink Reply by David on December 28, 2009 at 9:26

Louisiana has a ten year period from the signing of the lease:

Nonuse covers almost anything. If they do almost any activity at any point in the ten year period on the lease, a new ten year period starts from the point of that activity.

The landmen on here can give you more information.

David

PART 3. MODES OF EXTINCTION OF THE MINERAL ROYALTY

§85. Extinction of mineral royalties

A mineral royalty is extinguished by:

(1) prescription resulting from nonuse for ten years;

(2) confusion with the title out of which it was created;

(3) renunciation of the royalty right on the part of him to whom it is due, or the express remission of his right;

(4) expiration of the time for which the royalty right was granted or happening of the dissolving condition attached to the mineral royalty; or

(5) extinction of the right of him who established the mineral royalty, except that the extinction of a mineral servitude by inheritance or by any act of the servitude owner does not extinguish a royalty burdening the servitude unless the royalty owner is a party to the act or otherwise consents expressly and in writing to become bound by it.

Acts 1974, No. 50, §85, eff. Jan. 1, 1975.

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landownerPermalink Reply by drilltheshale on December 28, 2009 at 9:34

I'm sorry--not being clear on this. Lease is three years w/o option to renew. When would it expire (assuming no well is drilled prior to expiration)--three years from lessor signing, lessee signing, date placed on the top of the lease, date the lease is actually recorded?

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on December 28, 2009 at 9:39

David is referring to a mineral servitude created by the sale of minerals or royalty and it's ten year prescription period. The effective date of a lease is the date at the top of page one unless definitive language addressing effective date appears in an exhibit to the lease. The date the lease was recorded is of no consequence as to initial term.

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landownerPermalink Reply by drilltheshale on December 28, 2009 at 10:17

Thanks to both of you.

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