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Royalty Clerk

Oil and gas leases in Texas

Is your oil lease still in force?

A lease has a date, a primary term and words about what keeps it going. The state records what it sold every month. Set them side by side and see what is worth asking the operator.

A date is not a verdict.

SAME DATE, TWO RECORDS · AN EXAMPLE

Lease A

Sells oil after the dashed line, the end of the primary term.

Lease B

Reports nothing after it. That is a question for the lease's words, not an answer.

The record is half of it. The lease is the other half.

Free, no account

Check your lease against the record

Pick the lease. Add what the lease says. Nothing you type is stored or sent, and we never say a lease has ended or is in force.

Type the lease name from your stub. Pick it from the list.

2. What does your lease say?

Does it have a shut-in royalty clause?

Optional. The lease says. Leave it empty if you do not know.

The record will show here.

Pick your lease, then add the date and the term. You will see the sales month by month with the end of the primary term marked.

Read your lease

What the lease’s own words decide

The Legislature has not written rules for these clauses. They are terms people negotiate, and the Texas Supreme Court reads each lease by its wording. Find the words in yours.
Wording found in oil and gas leases, what each decides about how long the lease lasts, and the source
If your lease saysWhat that decidesSource
“for a term of three years and as long thereafter as oil or gas is produced”After the primary term the lease lasts while the lease produces. What counts as production, and for how long a pause is allowed, is in the lease.Anadarko v. Thompson
“as long thereafter as gas is or can be produced”One added word changes the question. In Anadarko v. Thompson the Court held that a well capable of production sustained a lease of this kind even when actual production stopped for longer than the lease's 60-day cessation clause.Anadarko v. Thompson
A cessation-of-production clauseSays how long production may stop before the lease is affected, and often what the lessee may do in that time.Anadarko v. Thompson
A shut-in royalty clauseA payment that keeps the lease in effect when a well capable of producing is not selling. The clause's own words set the payment and the date it is counted from. In BP v. Red Deer that date was when gas was last sold or used.BP v. Red Deer TRERC, lease extensions
A Pugh clauseWithout one, production on one tract holds the whole lease. With one, at the end of the primary term the lease continues only on the pooled acreage and ends on the rest.Mathews v. Sun Oil TRERC, lease extensions
A retained-acreage clauseAfter the primary term or a development period the lease continues only as to the acreage the clause names around each producing well. Two Supreme Court cases in 2018 reached different results because the two clauses read differently.Endeavor v. Discovery XOG v. Chesapeake
A depth clauseEnds the lease below a stated depth after the primary term or a development period. What “formation” means in the clause matters, and the lease usually has to define it.TRERC, lease extensions
An extension or an optionA later agreement, often for a payment, that continues the lease's terms. The words of that agreement decide what it does.TRERC, lease extensions

Two leases can look alike and read differently

Endeavor and XOG were decided the same day on retained-acreage clauses and came out differently because the two clauses were worded differently. Read the clause in your own lease. Endeavor v. Discovery

What the record shows

What the state’s production record can and cannot show

It shows

  • The oil and gas a lease sold, month by month, from 1993. RRC, Production Data Query
  • Which company reported the lease, and when that changed.
  • The status the Railroad Commission lists for the lease.
  • Months with no report, marked so you can count them.

It does not show

  • Pooled units, or other wells that hold the acreage you do not see on the map.
  • Work on a well, or a well that is shut in and capable.
  • Shut-in or extension payments the operator made.
  • What the lease says, or what the operator relies on.

If they do not fit together

What to do when the record and the calendar disagree

Ask. The operator has the records the state does not.
  1. Step 1: Find the clauses in your lease

    Look for the habendum clause, and for any cessation, shut-in, Pugh, retained-acreage or depth clause. Note the page.

  2. Step 2: Ask the operator in writing

    Send it by certified mail and keep the receipt. Ask what it relies on to hold the lease past the date: production, a shut-in payment, an extension or a pooled unit.

  3. Step 3: Look in the county records

    A recorded extension, pooled unit designation or release is on file with the county clerk where the land is.

  4. Step 4: If the lease has ended, ask for a release

    A release of lease is a recorded paper in which the lessee gives up its rights. Your Mineral File writes the request from your profile and states the lease date, the term and the state's record.

  5. Step 5: Before you sign anything new

    A new lease or an extension is a new set of words. Check the offer first.

FAQ

Questions people ask

How do I know if my oil and gas lease is still in force in Texas?

The words of the lease decide, and the state's production record is the first evidence to set beside them. Look for the habendum clause, which gives the primary term and what continues the lease after it, and for any cessation, shut-in, Pugh or retained-acreage clause. Then look at whether the lease reports sales month by month. If the two do not fit together, ask the operator in writing what it relies on.

What happens when the primary term ends?

The primary term is a date. A typical lease then continues for as long as oil or gas is produced, or, in the wording in Anadarko v. Thompson, as long as it "is or can be produced". The lease says what counts, and for how long a pause is allowed. The end date alone does not tell you the lease is over or that it continues.

Does a pause in production end a lease?

It depends on the cessation clause and the habendum wording. In Anadarko v. Thompson the lease ran as long as gas "is or can be produced" and had a 60-day cessation clause, and the Court held that a well capable of production sustained the lease even though actual production stopped for longer than 60 days. A lease that says only "is produced" asks a different question.

What is a shut-in royalty?

A payment, set by the lease, that keeps the lease in effect when a well that can produce is not selling. In BP v. Red Deer the Court held that the clause's own wording set the operative date: the date gas was last sold or used, not the date the payment was made or the valve closed. Shut-in royalties are also mineral proceeds under Property Code section 75.001, which matters for unclaimed property.

How do I check whether a well is still producing?

The Railroad Commission publishes monthly production for every lease, back to 1993. The check above reads that record for the lease you pick and shows the last 36 months. A month with no report is not the same as an expired lease: it can be a shut-in well, a reporting delay, work on the well, or a well that is pooled with others.

Look up any Texas lease

What is a Pugh clause?

A clause that divides pooled acreage from acreage that is not pooled. At the end of the primary term, or the end of continuous drilling if the lease has that, the lease continues only on the pooled acreage and ends on the rest. Without one, the default rule stated in Mathews v. Sun Oil is that, absent anything in the lease to the contrary, production on one tract keeps the lease alive as to all the tracts it covers.

Can I ask the operator to release my lease?

You can ask in writing. A release of lease is a signed paper, recorded in the county records, in which the lessee gives up its rights under the lease. Whether the lease has ended is a question about its words and the facts. Your Mineral File writes the request from your profile, states the lease date, the primary term and the state's record, and asks the lessee what it relies on.

Before you sign any new lease or extension

Where are oil and gas leases recorded?

In the real property records of the county clerk where the land is. A lease, an extension, a pooled unit designation and a release are each recorded there. Ask the clerk for the instruments filed under the lessor's name for your land.

The estate report orders copies of recorded leases

Keep your lease terms with your file.

Add the lease and its dates. We watch the record, remind you before the primary term ends and write the release request.