HAVE YOU BEEN ASKED TO SIGN AN EXTENSION, RENEWAL, OR REVIVOR OF AN OIL AND GAS LEASE?
Generally this request will be made when 1 of 2 situations have occurred.
- There is no production on the lease you previously signed and it has or will soon expire due to lack of production, the lessees failure to make timely rental payments, or the lease reaching the end of its primary term. In such instances, you may be asked to sign an Extension or Renewal.
- There has been production on the lease, the primary term of the lease has expired, and due to a cessation in production, or a lack of production in paying quantities or workover/drilling operations, the lease is deemed to have expired. You may be asked to sign a Revivor if the lessee wants the right to continue to operate and produce the well or wells under the terms of the old
lease. (The Revivor is intended to make the prior lease effective again.)
Whichever situation arises, you should recognize that you are not required to sign an extension, renewal, or revivor, unless you have previously agreed to do so. If you do, you may expect to be compensated. In addition, recognize that you are extending, renewing, or reviving the previously granted lease, which may contain terms or provisions you now find unacceptable.
Negotiations involved in agreeing to grant an Extension, Renewal, or Revivor can include the amount of compensation you are to receive, changing or amending the terms and provisions in the prior lease. Rather than signing an Extension, Renewal, or Revivor of a prior lease, you may elect to enter into a new lease.
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