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Oil/Gas/Five-year option on oil and gas lease


We have a 50 acre tract in Green Co Pa we leased 5 years ago with Chesapeake Energy. Have done nothing in 5 years now we get a letter they sold are lease to another Company. Are we allow to renegotiate or are we locked in to the lease payment they gave us 5 years ago. I feel we are getting shortchanged as our neighbors are re leasing their property for 5 times what we are getting. Chesapeake had a 5 year renewal clause not this new company. We were told Chesapeake would probably drill in the five year range. Do we have any recourse. Thanks

As long as the new owner of the lease pays you the extension bonus before the initial five-year term expires, then they can extend the lease for an additional five years if the lease includes that option. It doesn't matter that CHK no longer owns the lease. Any rights remaining when it was sold would transfer to the new owner. As to your other concern about Chesapeake indicating they were going to drill within the first five years; a lease grants the lessee the exclusive right to drill, but does not (unless otherwise stated in writing in the lease) imply an obligation to drill.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub


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Frederick M. Scott


Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.


I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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