December 15, 2012
LEASE TERMINATION– LEASE INFORMATION FOR LANDOWNERS
Joe Heath, Esq., Ellen Harrison, Fleased
DOCUMENTS PREPARED BY AN EXPERIENCED ENVIRONMENTAL ATTORNEY WORKING WITH GDACC
Letter to gas companies claiming Force Majeure as a reason to arbitrarily extend gas leases. Word doc.
Why Force Majeure claims are invalid Word doc
We’ve received requests for more information about the ramifications of the November 15th US District Court ruling that force majeure does not extend leases. We encourage you to work with experienced oil and gas lease attorneys to interpret your specific lease terms and determine whether this ruling affects you. This is what we’ve learned so far from the experts:
Many leases have a 5-year primary term with a clause allowing the gas company to extend the lease for another 5 years by simply tendering (writing) a check before the first term expires. The renewal language is usually quite limited and the gas company must “tender payment before the primary terms ends.” Some companies sent landholders (lessors) force majeure letters claiming that the lease was extended but did not send checks to extend the lease. Even with an auto extension clause, if the company has not mailed the extension check within the primary term, that lease has now expired. The companies might claim otherwise, but they would be wrong. They can’t make up an invalid legal theory, like force majeure, and rely on that to extend their leases. Such a claim will not hold up in court.
A land owner whose lease has expired should thus proceed to follow General Obligations law 15-304 to clear their title for their expired lease. Information on how to make such a filing can be found at: http://fleased.files.wordpress.com/2012/11/lease-termination-packet-11-20-12.pdf
Workshops on Lease Termination and Force Majeure: None scheduled at the moment – keep checking back with gdacc.org and fleased.org
- Cortland clerk fights abusive gas leasing practices | Innovation Trail.
- Hydrofracking Leases Subject of Regrets in New York – NYTimes.com. 9/23/11 – Coverage of GDACC Lease Termination Workshop in Lafayette. 9/19/11