landowner

Time Limit on Request to Release Lease

Our lease expired the beginning of July. We have contacted our lessor and requested that they release the lease since there is no production within our section. Is there a legal time limit to how long the company has to respond to our letter? By law, do they have 30 days or 60?Thanks.

Tags: Lease, Limit, Release, Request, Time, on, to

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landownerPermalink Reply by James on December 6, 2012 at 14:37

 

LEGISLATIVE DEVELOPMENTS
In 1981 the Louisiana Legislature amended the Mineral Code2 in
one significant aspect. Articles 206 and 207 provided a procedure for
a lessor or landowner to demand a recordable release of an expired
lease or other mineral right, with damages and attorney's fees the
consequence for failure to provide the release.' These articles were
amended to provide as follows:
S 206. Obligation of owner of expired mineral right to furnish
recordable act evidencing extinction or expiration of right; mineral
lease.
A. Except as provided in Paragraph B of this Article, when
a mineral right is extinguished by the accrual of liberative
prescription, expiration of its term, or otherwise, the former owner
shall, within thirty days after written demand by the person in
whose favor the right has been extinguished or terminated, furnish
him with a recordable act evidencing the extinction or expiration
of the right.


landownerPermalink Reply by Marc Stepman on August 9, 2010 at 4:43
Hi Skip

What would one need to say in one of these letters?

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 9, 2010 at 5:11
Marc, I am a landman and the language in the letter should be composed or approved by an O&G attorney. Form letters are not advised when dealing with mineral interests as specific detail is important.

landownerPermalink Reply by Lorea Cobb on August 9, 2010 at 5:41
Skip:
Sorry for the confusion. That's what I get for trying to be technical. Anyway, there is no activity whatsoever in our section. We did contact an attorney and he has sent a certified letter to the leasing company. I also read our lease and there is nothing in it about releasing the lease at the end of the term. I was wanting to know if the company had to reply in a set period of time, like 30 days or so. Thank you for your insight.

landownerPermalink Reply by THOMAS WALKER on August 9, 2010 at 7:31
I know this is a dumb question but if the lease has run out what is there to release

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on August 9, 2010 at 7:36
The point is to make the fact that the lease has expired available in the public record where companies do research to find unleased mineral interests and make them an offer. Without running a mineral history, it is impossible to know if a lease is no longer in force simply by inspecting it in the Clerk of Court's records.

Oil & Gas ProPermalink Reply by The_Baron on August 9, 2010 at 9:10
some title insurance companies feel better when they see a release as well.

Oil & Gas ProPermalink Reply by The_Baron on August 18, 2010 at 9:16
Just had the chance to reaserch this, as per the LA mineral code:

§206. Obligation of owner of expired mineral right to furnish recordable act evidencing extinction or expiration of right; mineral lease

A. Except as provided in Paragraph B of this Article, when a mineral right is extinguished by the accrual of liberative prescription, expiration of its term, or otherwise, the former owner shall, within thirty days after written demand by the person in whose favor the right has been extinguished or terminated, furnish him with a recordable act evidencing the extinction or expiration of the right.

B. When a mineral lease is extinguished prior to the expiration of its primary term, the former lessee shall, within ninety days after the extinguishment, record an act evidencing the extinction or expiration of the lease in the official records of all parishes wherein the lease is recorded.

Acts 1974, No. 50, §1, eff. Jan. 1, 1975. Amended by Acts 1981, No. 612, §1; Acts 1982, No. 358, §1, eff. July 18, 1982.

landownerPermalink Reply by Lorea Cobb on August 18, 2010 at 10:27
Could you translate this into simplified English for the rest of us? Thanks .

landownerPermalink Reply by Mac Davis on August 18, 2010 at 11:13
Section §206 B sounds like the lessee (leasing company) is required to file a release or something similar within 90 days when a lease is prematurely terminated. There's no mention of a requirement to file a release when the lease expires at the end of its term.

Section §206 A. looks like it applies to "mineral rights." It isn't clear to me that it applies to leases, but it might.

Oil & Gas ProPermalink Reply by The_Baron on August 19, 2010 at 3:21
No, It allies to leases.

Its really simple, if a lessor send written demand to their lessee after the lease has expired, the lessee has 30 days to file a release.

OR

If the lessee deceides to release the lease prior to expiration of the primary term, the lessee has 90 days to file a release.

landownerPermalink Reply by Mac Davis on August 19, 2010 at 11:25
Very good, Baron.

It doesn't look like the law has a lot of teeth, though. You'd have to incur an actual loss. If you sue, you might get "reasonable" attorneys fees refunded, but no punitive damages.

§207. Effect of failure to furnish act evidencing extinction or expiration of right; mineral lease

If the former owner of the extinguished or expired mineral right fails to furnish the required act within thirty days of receipt of the demand or if the former lessee of a mineral lease fails to record the required act within ninety days of its extinguishment prior to the expiration of its primary term, he is liable to the person in whose favor the right or the lease has been extinguished or expired for all damages resulting therefrom and for a reasonable attorney's fee incurred in bringing suit.

Amended by Acts 1981, No. 612, §1; Acts 1982, No. 358, §1, eff. July 18, 1982.

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