Lease Agreement Disputes

Lawyers For Skillfully Resolving Lease Disputes In Houston

Lease agreements between landowners and oil and gas companies are common in Texas. While most find the relationship to be extremely beneficial, there are times when oil and gas lease disputes require the help of a skilled lawyer. A dispute over an oil and gas lease can greatly affect the profitability of an energy venture. The lawyers at Burford Perry LLP offer extensive experience in resolving oil and gas lease disputes. We focus on achieving solutions that are acceptable and workable while always protecting our clients’ rights.

How Do Lease Disputes Happen?

While most Texas landowners value what is on top of the land, oil and gas companies value what is below the surface of the land. When landowners lease their land to oil and gas companies while retaining surface ownership in return for royalties on the oil and gas production, the parties can end up in a lease dispute.

Oil and gas leases should lead to a mutually beneficial relationship between landowners and oil and gas companies. There are a variety of circumstances that can give rise to oil and gas lease disputes. Some of the most common disputes occur when either the landowner or the oil and gas company fails to uphold the lease terms. Both the landowner and the oil and gas company owe duties to each other. Lease disputes happen when either the landowner or the leasing company fail to live up to their duties under the lease agreement.

Common duties oil and gas companies owe to landowners include:

• Duty to develop – In some instances, oil and gas companies have a contractual duty to develop the minerals on the land they are leasing within a specified time. Failing to meet this duty leads to lease forfeiture or damages for the landowner. Whether this has happened and what remedies a landowner should seek are matters for an experienced lease attorney.
• Duty to protect against drainage – Sometimes oil and gas reservoirs expand beyond the lease property. When this occurs, another oil and gas company may be extracting a mineral rights owner’s oil and gas through a different lease. An oil gas company is expected to protect the landowner from other companies tapping into the same reservoir and ensure that landowners receive the royalties they are owed.
• Duty to pay royalties – The lease agreement, as well as any related documents like pooling agreements, will determine whether a landowner is owed royalties on the mineral productions. Often, landowners have questions about whether sufficient royalties have been paid.
• Duty to market – Once oil and gas is extracted from the ground, oil and gas companies are expected to refine the product and sell it on the market. A producer generally has a duty to market oil and gas once a producing well is drilled. What constitutes the “market price” is often the subject of disputes.
• Duty to meet deadlines or pay compensation – Oil and gas leases often contain predetermined deadlines for project completion. Many oil and gas leases contain provisions expressly providing for compensation or other benefits to the owner surface estate if deadlines are not met.

Except in narrow circumstances, the surface owner does not have the right to participate in or control the development of the minerals on the property. By leasing the land, oil and gas companies have a right to:

• Enter the land at any time
• Operate on the land at any time
• Determine the best course of action and operating procedures for extraction

How Are Oil and Gas Lease Disputes Resolved?

Resolving an oil and gas lease dispute is not an easy matter. The written lease agreement will serve as the legal document to clarify any disagreements. A lease dispute can involve a number of different issues that all need to be resolved at once. These cases are complicated and require the assistance of an experienced oil and gas attorney. While some oil and gas lease disputes can be resolved through careful negotiations and settlements, other disputes will have to go through court or arbitration proceedings to reach a resolution. Regardless of how a lease dispute is resolved, the parties involved need strong legal representation.

Houston Lease Dispute Lawyers With Over 55 Years Combined Experience

The attorneys at Burford Perry LLP have worked with both landowners and oil and gas companies to resolve lease disputes. Our lawyers have over 55 years of combined experience helping resolve oil and gas lease disputes. We can evaluate existing agreements and represent you in negotiations or litigation to get the best possible outcome.