Understanding your options when your mineral lease comes to an end.
Get Your Free Mineral ValuationIf you've received a lease bonus payment in the past but haven't seen any drilling activity, your lease may be approaching expiration—or may have already expired. Understanding what happens at the end of a lease term helps you make informed decisions about your minerals.
This guide explains how oil and gas leases work, what happens when they expire, and what options you have as a mineral owner.
Every oil and gas lease has two distinct phases:
The initial fixed period of the lease (typically 3-5 years). During this time, the operator has the right to drill on your minerals.
If no well is drilled or drilling operations haven't begun by the end of the primary term, the lease expires automatically.
If a producing well is established during the primary term, the lease continues "for so long thereafter as oil or gas is produced."
This can extend the lease indefinitely—some HBP leases have lasted 50+ years.
Key Point: If you're still receiving royalty payments, your lease is likely held by production and hasn't expired. If you received a bonus payment years ago but never any royalties, your lease may have expired.
When an oil and gas lease expires, several things occur:
Lease terminates automatically: No action required from you—the contract ends on its own terms
Minerals become unleased: You regain full control over your mineral rights
You retain full ownership: Your minerals were never sold—you simply granted temporary development rights
Operator's rights end: The previous lessee has no continuing claim to your minerals
Note: Lease language varies. Some leases have extension clauses, continuous drilling provisions, or other terms that affect expiration. Review your specific lease document or consult a professional for your situation.
Do nothing and wait for an operator to approach you with a new lease offer. If drilling activity picks up in your area, landmen may contact you. This is passive and requires patience.
Research operators drilling in your area and reach out to them. You can also work with a landman or broker to market your acreage for lease. This requires effort and knowledge of who's active nearby.
Convert your minerals to a lump sum by selling to a buyer like Buckhead Energy. You receive immediate cash rather than waiting for uncertain future leases or royalties.
Keep your minerals as a long-term asset. They don't require maintenance, though you may owe property taxes. Pass them to heirs as part of your estate.
There's no guarantee that another operator will lease your minerals after expiration. Several factors influence whether you'll receive new offers:
Active drilling in your area
High oil and gas prices
Proven geology and production nearby
Operators actively acquiring acreage
Little or no drilling activity nearby
Low commodity prices
Poor or unproven geology
Area already fully developed
Many mineral owners wait years for lease offers that never come. Just because you were leased once doesn't mean you'll be leased again. Development activity shifts as operators focus on different plays and areas.
Whether your minerals are leased, unleased, or producing affects their value—but not always in the way you might expect:
Generally most valuable. These generate immediate, verifiable cash flow. Buyers can analyze production history to project future value.
Value reflects the lease terms, bonus already paid, and likelihood of drilling. In active areas, a lease may add value. In quiet areas, it may not matter much.
Value depends on location and potential. In areas with active development, unleased minerals may be valuable because the buyer can negotiate their own lease terms. In areas with no activity, value is speculative.
Bottom Line: Location and development activity matter more than lease status. Unleased minerals in the Permian Basin may be worth more than producing minerals in an inactive area.
To determine whether your lease has expired:
Review your original lease document: Look for the effective date and primary term length to calculate expiration
Check county clerk records: Search for recorded lease releases or assignments in your county
Search state oil/gas commission: Most states have online databases showing well permits and production
Contact the operator: Call the company that leased your minerals and ask about lease status
Check for royalty payments: If you're receiving royalties, your lease is likely still active (HBP)
Lease interpretation can be complex. If you're unsure about your lease status, consider consulting with an oil and gas attorney who can review your specific documents.
If a well was drilled during the primary term and is still producing, your lease is "held by production" and hasn't expired. Here's what that means:
Lease continues indefinitely: As long as production continues, the lease remains in effect
Even minimal production holds the lease: A well producing small amounts can hold the entire lease
You receive royalties: You're paid based on production according to your lease terms
Operator can drill more wells: The lease typically allows additional development
If your lease includes a Pugh clause, acreage or depths not included in a producing unit may be released. This means part of your minerals could become unleased while the rest remains HBP. Check your original lease for Pugh clause language.
Learn more about HBP status in our detailed guide: Held by Production Explained
Whether your lease has expired or is still active, we can help you understand your options and what your minerals are worth.
Request Your Free ValuationReview your original lease document for the primary term length and effective date. If the primary term has passed and no wells are producing, the lease has likely expired. You can also check for a recorded release of lease at your county clerk's office or search your state's oil and gas commission records for well activity on your minerals.
When a lease expires, you regain full control of your minerals. They become unleased, meaning you have the right to negotiate a new lease with any operator, wait for lease offers, or sell your minerals outright. The previous operator has no continuing rights to your minerals.
There's no guarantee of receiving a new lease offer. It depends on factors including current commodity prices, operator drilling plans in your area, development activity nearby, and the geological potential of your minerals. In active areas, new offers may come quickly. In quiet areas, you may wait years or never receive another offer.
Yes, you can sell minerals after a lease expires. In fact, some buyers prefer unleased minerals because they can negotiate their own lease terms. The value of unleased minerals depends on location, geological potential, and development activity in the area rather than existing lease terms.
Held by production means a lease continues beyond its primary term because a well is producing oil or gas in paying quantities. As long as production continues, the lease remains in effect indefinitely. HBP prevents a lease from expiring even when the primary term ends, potentially keeping your minerals leased for decades.
Disclaimer: This information is for educational purposes only and should not be considered legal advice. Lease language and state laws vary significantly. Consult with a qualified oil and gas attorney for specific questions about your lease status or interpretation.